Apple’s main business model has always been hardware-centric – to sell phones and computers. However, in light of the recent news of Apple’s iPhone sales dwindling, the company is now shifting its focus to other means of revenue growth to keep its consumers occupied in the world of Apple. That is exactly what happened yesterday when Apple unveiled a set of new services at the Apple March Event. Gadi Schwartz, NBC News correspondent rightly sums up Apple’s latest plan.
Apple wants to be a newsstand
Apple wants to be a bank
Apple wants to be an arcade
Apple wants to be cableTV
Apple wants to be a movie studio
Apple wants to be Sesame Street
Apple wants to be Netflix/Hulu
Apple wants to be Oprah pic.twitter.com/B5jhDa4VHe
— Gadi Schwartz (@GadiNBC) March 25, 2019
Here’s the detailed report.
Video subscription service: Apple TV+
The Apple TV+ is a new television subscription service (yes in the likes of Netflix and Amazon Prime) which will give subscribers access to the many shows the company has been developing. Apple TV+, the company says, “will become the new home for the world’s most creative storytellers featuring exclusive original shows, movies, and documentaries.” Apple plans to launch Apple TV+ in over 100 countries sometime this fall, though it did not disclose the pricing. The subscription service will be ad-free, available on demand, and viewable both online and offline.
Apple also announced Apple TV Channels as a part of the Apple TV app, which will let customers pay and watch HBO, Showtime, Starz, CBS All Access, and other services directly through the TV app.
Apple TV + puts the company in direct competition to Netflix, Hulu, and Disney who also offer their own video subscription services. The company is trying to find new ways to market the Apple experience to consumers. With iPhone’s sales slowly receding, Apple’s foray into video subscription services is a new initiative to bring everyone into the walled orchids of Apple.
What Apple’s 🍎 original content play is really about: The tech and telecom giants taking over Hollywood — Apple, Amazon, AT&T — are using premium film and television as a marketing tool for core products that have nothing to do with film and television https://t.co/hIpBfr9H1J
— Dylan Byers (@DylanByers) March 25, 2019
Media subscription service: Apple news+
Next in line, is the Apple News Plus service, which adds newspapers and magazines to the Apple News app.
The service costing $9.99 per month will feature almost 300 magazines and newspapers including People, Vogue, National Geographic Magazine, ELLE, Glamour, The Wall Street Journal, Los Angeles Times, and more. Surprisingly, The New York Times and The Washington Post, have opted out of joining the subscription service. Although the publishers were not authorized to speak publicly about the plans, it is speculated that opting out from this subscription service is because of two major reasons. First, Apple is asking for a cut of roughly half of the subscription revenue involved in the service. Second, Apple has also asked publishers to give unlimited access to all their content which is concerning.
Combined, the subscriptions provided through Apple News+ would cost more than $8,000 per year. Apple News Plus will also come with “Live Covers,” which shows animated images instead of static photos for a magazine’s cover.
Apple has been quite vocal about maintaining privacy. A striking feature of Apple news+ is the heavy emphasis on private recommendations inside the news app, including magazines. The app downloads a set of articles and manages recommendations on-device. It also does not give any data to advertisers. The company noted in the live stream, “Apple doesn’t know what you read.”
Apple News+ is available in the U.S. and Canada. The first month is free. In Canada, the service will be offered at $12.99 per month. Later this year, Apple News+ will arrive in Europe and Australia.
Game subscription service: Apple Arcade
Apple is now your new gaming zone with a new game subscription service, the Apple Arcade. Presented as the “world’s first game subscription service for mobile, desktop, and living room”, it will feature over 100 new and exclusive games. These games will be from acclaimed indie developers, major studios as well as renowned creators. Apple will also be contributing to the development costs for such games.
With the subscription service, players can try any game in the service without risk. Every game includes access to the full experience, including all game features, content and future updates with no additional purchases required. Apple says Arcade games don’t track usage, gameplay or the titles a user plays more. Apple Arcade will launch in fall 2019 in more than 150 countries.
Arcade as a single subscription package may also possibly bring premium games the traction they may have been lacking otherwise. People also pointed out that Apple’s primary target for Arcade may be parents. A comment on Hacker News reads, “I think a lot of folks looking at this from the point of view of an adult gamer are missing the point: the audience for this is parents. For 10 bucks (or whatever) a month you can load the iPad up with games and not worry about microtransactions or scummy ads targeting your kids. “Curated” is a signal that can trust age recommendations and not worry about inappropriate content.”
Netizens also believe that gaming subscription services will payout more than traditional models. “The difference between this and music is that most people do not want to hear the same songs over and over again. The $10 is spread across so many artists. Video games will capture the attention of a person for hours in a month. I can see that a big chunk of the monthly fee going to a couple of titles.”, reads a comment on Hacker News.
Payment subscription service: Apple Card
Probably the most important service, Apple is now venturing into the banking sector, with a new digital credit card with simpler applications, no fees, lower interest rates, and daily rewards. The Apple Card is created in partnership with Goldman Sachs and Mastercard. It is available as two options. First, as a digital card which users will be able to access by signing up on their iPhone in the Apple Wallet app. Second, as a physical titanium card with no credit card number, CVV, expiration date, or signature. All of the authorization information is stored directly in the Apple Wallet app.
The card makes use of machine learning and Apple Maps to label stores and categorize them based on color. Users can easily track purchases across categories like “food and drink” or “shopping.” It also has a rewards program, “Daily Cash,” which adds 2 percent of the daily purchase amount in cash to your Apple Cash account, also within the Wallet app. Though, purchases made through the physical card will get just 1 percent cash back.
Again, privacy is the most important feature here. Apple will store the spending, tracking and other information directly on the device. Jennifer Bailey, VP of Apple Pay said, “Apple doesn’t know what you bought, where you bought it, and how much you paid for it. Goldman Sachs will never sell your data to third parties for marketing and advertising.”
This is probably the service that has got people the most excited.
The average US household has over $8000 in revolving credit card debt. Literally drowning in fees. Could a no-fee card change that? https://t.co/86lH6faPXn
— Jacob Ward (@byjacobward) March 25, 2019
The most thought-out, game changing thing Apple has announced so far isn’t in the news or television space … it’s the Apple Card credit card, which isn’t what anyone was walking about before this morning …. #AppleEvent
— Dylan Byers (@DylanByers) March 25, 2019
Apple Card will be available in the US this summer.
Why is Apple changing focus to services?
With iPhone sales growth slowing, Apple needs new measures to bring in a large number of users to its world. What better than to foray into subscription streaming services and premium original content. With the new announcements made, Apple is indeed playing the perfect middleman between its users and TV, gaming, news, and other services, bolstering privacy as their major selling point, while also earning huge revenues. As perfectly summed by a report from NBC News, “The better Apple’s suite of services — movies and shows, but also music, news, fitness tracking, mobile payments, etc. — the more revenue Apple will see from subscribers.”