A leaked internal email surprised many when it revealed that Apple Music hit 40M subscribers earlier this month, up from 38M just two months earlier.

One analyst is now forecasting that the streaming music service will grow 40% per year …

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The WSJ reports the prediction.

Ben Schachter of Macquarie Capital estimates that Apple Music will average 40% annual growth over the next three years, making it the fastest-growing part of the company’s services segment. Apple is expected to report total service revenue of $8.3 billion for the fiscal second quarter being reported on May 1—up 18% on year.

Schachter does, however, observe that Apple Music is likely to be one of the least profitable parts of the business.

The rub, of course, is that music streaming isn’t a terribly profitable business, due mostly to the royalties streamers must pay to labels and artists. Mr. Schachter estimates that Apple Music commands a gross margin of around 15%. That is actually lower than the 24% that Spotify projects for this year.

Competition between Apple Music and Spotify continues to be fierce. There have been arguments about which service saw the most streams of The Weeknd’s new release, and Spotify recently poached Apple Music’s hip-hop programming head. Hip-hop is a genre in which Apple has been particularly successful.

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