Reports surfaced last week that Apple (NASDAQ:AAPL) could be losing its Apple Music chief, Jimmy Iovine. The rumors suggested that the music exec planned to leave the company in August after his restricted Apple shares vested, which he received as part of Apple’s $3 billion acquisition of Beats. Assuming those shares vested over four years (which is a common vesting schedule), Iovine would be free to leave with his shares intact after July 31, 2018, which marks four years after the deal officially closed.
It looks like those rumors are false.
Iovine isn’t going anywhere anytime soon
Variety reports that Iovine is committed to staying at Apple in order to continue building Apple Music, which now has over 30 million paid subscribers. Iovine told Variety:
I am almost 65, have been with Apple for four years and in 2 1/2 years the [Apple Music] service has gotten to well over 30 million subscribers and Beats has continued its successful run. But there’s still a lot more we’d like to do. I am committed to doing whatever Eddy [Cue], Tim [Cook] and Apple need me to do, to help wherever and however I can, to take this all the way. I am in the band.
Iovine also confirmed to the outlet that his shares will indeed fully vest by August, but as is common with vesting schedules, his shares have been vesting over time, so the piece that will vest later this year represents “a tiny portion” of his overall holdings. The longtime music producer took issue with the fact that the speculation framed his motivations as purely financial, whereas Iovine says he wants to help the music industry continue its ongoing transition to streaming models. His goal is to “help streaming come to scale.”
The exec also hinted that more original content could be in the works, noting that many of the most popular video-streaming services are able to differentiate themselves with large catalogs of original content, while music-streaming services all offer nearly identical catalogs. Iovine is largely credited with shaping Apple’s original video content strategy. However, Iovine did suggest that he is approaching an age where he’ll be “slowing down.” He is almost 65 years old, and said he doesn’t see himself in the same place in 10 years.
This is good news for Apple, as Iovine has been instrumental in creating and growing Apple Music to where it is today, the No. 2 music-streaming service in the world by paid subscribers. Apple is working hard to catch up to Spotify, and has the benefit of both vast financial resources and talented executives with deep industry ties. Iovine leaving could have risked Apple Music losing some strategic direction and leadership, which could have derailed paid subscriber growth at a time when Apple is trying to focus on growing its services business.
Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.