US technology giant Apple today announced a number of new and revamped features for its device and content platforms. Developments include new content subscription services, revamped content platforms and updated payment systems, summarised below.
- Apple News – The app aggregates printed content in a digital platform with a personalised news feed and a new Apple News+ subscription package that includes 300 magazines covering most popular genres. The subscription is priced at $9.99 pm with a one-month trial with family sharing options included.
- Apple Pay – In addition to the announced expansion of Apple Pay to more than 40 countries worldwide, Apple announced a new physical and digital credit card service, Apple Card, with functionality built in to Apple Pay. The service is part of a partnership with Goldman Sachs and Mastercard.
- App Store – A new digital mobile game subscription service, Apple Arcade, giving access to more than 100 new and exclusive games with functionality across iPhones, iPads and Apple TV sets. The service will be available in over 150 countries and will also have family sharing options available for one, as yet unannounced price.
- Apple TV – With a May software update, the Apple TV app will be revamped with movie content from Apple’s iTunes store built in alongside content from third party providers including OTT subscription video services Hulu, Playstation Vue and Fubo TV as well as the multiscreen content of US pay TV providers Spectrum, DirectTV and Optimum. A new Apple TV Channels app will also allow Apple consumers to purchase subscriptions to the likes of Starz, HBO and Showtime on an a la carte basis. For the first time, the Apple TV app will be available on Samsung smart TVs followed by LG, Sony and Vizio as well as on Roku and Amazon Fire devices. The service will also expand from 10 current countries to over 100. Furthermore, a new paid OTT subscription service called Apple TV+ was announced, providing Apple’s original content. Apple TV+ will launch in 100 countries in the autumn. No pricing details were given.
Apple’s commitment to content across all media forms as well as credit and payment options indicates its continued investment in its expanding service provision businesses. Like many of the modern technology giants, Apple’s core business is not content or services. Amazon's core business is retail, for Google it is advertising, for Apple it is its devices business. iPhone sales have fuelled Apple's explosive growth over the past decade but as that market matures the role of services and media will be increasingly important to the company.
This is further reinforced by the expansion of Apple’s device portfolio for its TV app, becoming available for the first time outside of Apple’s core device base on major smart TV and DMA platforms. The move by Apple is in line wider wider industry trends, as content providers strive to be platform-agnostic.
Apple has a notably more open position on the availability of its services across device platforms than it does features of its operating systems. Functionalities such as iMessage are restricted to Apple’s own ecosystem of iOS and MacOS devices. Services such as the iTunes Store, iCloud and Apple Music, however, have seen wider distribution. While mobile devices are prolific, the traditional large screen television format remains an important part of the consumer viewing experience. According to IHS Markit’s Consumer Research, Apple TV's rollout on the announced third-party platforms is set to allow Apple to reach a total of 60% of US households across smart TVs and digital media adapters.
For Apple’s new content subscription services, only the price point for its News+ service was announced, with more information on the app store Arcade subscription coming soon. The pricing of both the Arcade and TV+ subscriptions will be particularly important for their development, especially considering the content they are offering. Importantly, these Apple subscriptions, like the News+ subscription, are said to include family sharing options as part of the package cost, giving them the same broader availability as other such services.
Apple’s entry into credit card services with Apple Card will make for a strong option for Apple’s customers avid users of Apple Pay services. The built-in functionality of the service into Apple Pay as well as the development of a physical card allows Apple to have insight into the transactions of its customers across all platforms, both connected to Apple Pay directly or not.
Apple's move up the value chain with Arcade is one of the first subscription services of its kind for mobile gaming, a sector that has gained significant traction in the last few years, with larger and more prominent developers backing the production of high quality content that can be played on the go. As it is for these subscription services on traditional gaming platforms that have existed for some time, the pricing and content library (both exclusive and otherwise) of Apple Arcade will be paramount to its success.
While an Apple video service has been anticipated for a number of years, only recently have details started coming through, including Apple’s reported spend of up to $1 billion on original content commissions. The details of Apple TV+ are still unclear and Apple’s initial investment in the service’s content is strong but by itself, it is unlikely to be enough to draw significant usage away from the dominant players such as Netflix or Amazon, especially with the major US studios set to release their direct to consumer offerings over the next few years.
Despite the gains in its service provision sector, Apple has another motivator behind its current content strategy. Video is a well-established and ever more significant tool for companies with larger ecosystems, including Amazon, Google and indeed Apple to retain customers and keep them invested in other products. Video can provide an overall more satisfactory and engaging user experience for consumers and can help to reduce churn from other, more developed business sectors. With devices still generating over 80% of Apple’s revenue, such retention will be beneficial for its core hardware business as well as to sustain and push its services division as it continues to grow.