Apple Cares About Services. It Should Also Start Caring More About Media.

1 minute read
| Editorial

Apple is a services company. You might have heard about it. Well, no. Not quite.

Tuesday’s earnings call underlined how important selling hardware, especially iPhones, is to the company’s financial wellbeing. Improving its media offering seems a clear way Apple can help rebalance things.

Barely Scratching the Surface of Media

Despite CEO Tim Cook’s increasing talk of the importance of services to Apple, it only brought in only $10.9 billion during the quarter ended December 29, 2018. That’s compared to $73.4 billion it earned from products over the same time period.

Mr. Cook was also keen to tout Apple’s advances in the media space. He proudly talked of deals with Oprah Winfrey for original content. He bragged that his firm would help break the cable bundle once and for all. The Apple execs couldn’t wait to tell you that Apple Music had hit 50 million paying subscribers.

Let’s be clear though. Apple is barely scratching the surface of the media industry. It has not released Netflix challenger, let alone killer. Spotify still dwarfs Apple Music in terms of subscriber numbers. Elsewhere, the likes of so-called Netflix for sports, Dazn, run by former ESPN President John Skipper, are making moves in both Europe and the U.S. too.

Apple changed the music industry with the launch of the iPod and iTunes. It help turned podcasting into a respected and essential medium. But it really is lagging well behind its competitors in this field now.

Oprah is Not Enough

This is particularly true when it comes to original content. The Orpah Winfrey deal, announced June 2018 is exciting. Anything with Oprah would be. But elsewhere we are only hearing stories of Apple’s retreating from and spending the bear minimum on original content.

I used to think that wasn’t the case. I used to think Apple Music had turned Apple into a media giant. But it hasn’t played out that way. And yet, if it really wants to alleviate some of the pressure on how many iPhones it has to sell each quarter, this seems an obvious growth opportunity.

The media game is a difficult one to get in to. I get that. But it is surely one Apple has to compete in if it wants to reenergize fans and investors after what will ultimately be remembered as a difficult quarter.

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aardman
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aardman

People don’t seem to notice how Apple has slowly been invading the financial services space. Google and Facebook can’t do this because nobody trusts them.

Once Apple Pay reaches a critical mass, it’s so easy to extend to other financial products.

If Apple Watch attains the ability to securely verify and authenticate your identity using biometrics (the technology isn’t there yet, but I bet it’s close) financial institutions will gladly pay for this service and Apple will own the space of secure transactions. I’m not just talking about normal credit card purchases but loans, securities trading, large ticket purchases, etc.