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4-min read

As Apple Embarks on The Services Era, Its Biggest Competition Isn’t Netflix But Amazon Prime

With multiple subscription services being touted, Apple could be looking at a world well beyond its core products, the iPhone, iPad and Mac.

Updated:March 25, 2019, 12:19 PM IST
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As Apple Embarks on The Services Era, Its Biggest Competition Isn’t Netflix But Amazon Prime
With multiple subscription services being touted, Apple could be looking at a world well beyond its core products, the iPhone, iPad and Mac.
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When Apple says “Its show time” at the Special Event later tonight, this could very well be the premiere of a new story for Apple. The services story. And this comes at a crucial time for the Cupertino based company, which now needs a new hit product (or service) considering the sales of the iPhone have been disappointing, at least as per the company’s own numbers for the quarter ending December. At the same time, the revenue from the services category $10.8 billion in revenue for the December quarter, up 19 percent from the same period last year. Perhaps then, Apple CEO Tim Cook will probably take the world’s most valuable technology company on a completely new path, the journey starting at the Steve Jobs Theater in Cupertino, California. Starring, quite possibly, could be a new TV streaming service and maybe even a game streaming service.

And this is set to be big, considering Apple is giving this Special Event the complete attention. Last week, in a series of fairly unexpected announcements, the company announced the to the iPad Mini, the new iPad Air, the updates to the iMac line-up as well as the second generation AirPods. Basically, the product lines that were due for upgrades have been done and dusted, out of the way now. Apple could easily have had the updates to hardware share the stage with the new services it is expected to announce, but it didn’t.

Apple’s current arsenal of services include Apple Music, which is close on the heels of Spotify Premium in terms of the subscriber base. Then there is the App Store, iCloud and the iTunes Store, to name a few. Surely Apple had seen the steady growth in its existing services portfolio over continuous quarters to warrant some more invention in that space. But what really could be the make-up of these new services?

For starters, it is expected that there will be a video streaming service. But its structure remains anyone’s guess. One way for Apple to set the ball rolling would be to take on the likes of Netflix and Amazon Video, with the sheer strength of content. For thatm it will need original content as well as partnerships with studios and perhaps even third-party streaming services to put all the content together. The other method, and perhaps more sensible in monetary terms, would be to have a subscription aggregator, with the additional value addition by Apple’s own Original content—something the company has invested in heavily over the past year. This way, Apple will be able to get a cut from every subscription it enables via the platform and will also be able to control the experience. A new app, whether it is called Apple TV remains to be seen, could offer users the subscription to other streaming services such as Hulu, HBO and Showtime for instance—from one app, as a simple checklist. This could be rather interesting for users who struggle with multiple subscriptions on different platforms. But for this to work, Apple will have to get a lot of these apps on board to even get on the users’ radar. However, interesting to note that Hulu, HBO and Showtime, for instance, are services which are available in the US and very select countries globally. India isn't a market for any of these apps yet. This will in a way limit the rollout of Apple's streaming service, since geographical rights will come into play.

The second service that Apple could announce today would be a news subscription package. This could put newspapers and magazines in one place, letting you pick and choose which digital subscriptions you would like to sign up for. If you thought that managing the video streaming app subscriptions was tough, wait till you have to sign up for international newspapers and magazines. Just over an year ago, Apple had acquired the Texture magazine subscription app, and we could see an evolved version of that. It is expected that Apple’s subscription news service would be priced at $9.99 per month—but whether Apple updates the existing News app or launches something new, remains to be seen.

It is perhaps worth expecting a game streaming service as well. This wouldn’t be entirely outlandish, considering Google just confirmed Stadia, its own game streaming service. Apple will be heavily dependent on game developers and publishers for titles, but in the end, will tap in well into Apple’s business model well—take a cut on every game played, and give the rest to the developer.

From the outset, Apple has a big advantage with the 1.4 billion strong active Apple device user-base globally. This is the audience which will get the new services on their fingertips instantly and will probably drive the surge in sign-ups. Whether Apple also supports other platforms such as Windows (it has iTunes and iCloud on Windows) and Android (Apple Music is available for Android) remains to be seen—that certainly would be an attraction, unless they want to keep it restricted to iOS and macOS devices and hope to drive more hardware sales in the process.

There will be parallels drawn with Amazon Prime, if Apple does go ahead and launch a video streaming service, a game streaming service as well as a news subscription service. It is all about bundling together different products under one identity, and that is what Apple could do, in many ways. The only difference being that while Amazon bundles Video, Music, Photos, shopping benefits etc under one Prime subscription, Apple could take a more take-your-pick sort of route.

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