CUPERTINO, Calif. — Apple is not satisfied with having an iPhone in every pocket and a Mac on every desk. It wants you to never leave the Apple universe.
At an event on Monday at its Silicon Valley headquarters, Apple unveiled an expansive strategy to build services for the billion-plus iPhones and iPads in use. It will offer monthly subscription services for video programming and news as well as a new credit card.
Apple introduced a new video service, called Apple TV+ (Plus), with Hollywood star power. Steven Spielberg, Reese Witherspoon, Jennifer Aniston, Steve Carell and other entertainment heavyweights — including Sesame Street’s Big Bird — took the stage at Apple’s Steve Jobs Theater to hype it. Apple TV+ will not carry advertising and will launch this fall in more than 100 countries. Apple did not offer any details on pricing.
The new services represent an evolution of Apple’s business. For years, Apple focused mainly on selling hardware products, counting on consumers to upgrade phones and tablets every few years. But as technology and design improvements have become less apparent, demand for the iPhone, the company’s flagship product, has leveled off.
The company is now focused on selling content and services for Apple’s roughly 1.4 billion active devices, which include Apple TV boxes, Apple Watches, Mac computers and iPads.
In addition to paying $1,000 every two or three years for a new iPhone, Apple is hoping customers will also pay $10 a month for content, as well as $20, $30 or $40 a month to be their one-stop shop for music, videos and news for all their devices.
Apple is late to join a crowded field of technology companies that are providing original video programming. The company’s billion-dollar bet on video entertainment pales in comparison to the checks Netflix and Amazon have been cutting in Hollywood and around the world for years. In 2018 alone, Netflix spent at least $8 billion on new content, and Google’s YouTube and Facebook have also spent heavily to secure original programming.
Apple has 56 million subscribers to its streaming music service. It offers additional cloud storage for a monthly fee, and it takes a cut of the money spent on apps running on its devices as well as a sliver of digital payments made by iPhones. Apple generated $10.9 billion from services in the last quarter of 2018, compared to $73.4 billion of hardware sales.
But the company sees an opportunity to become a bigger part of its consumers’ lives.
Apple said its Apple News+ (Plus) subscription will include access to 300 magazines, including The New Yorker, National Geographic and InStyle. It will also feature newspapers like The Los Angeles Times and The Wall Street Journal. The subscription will cost $9.99 a month and is available beginning today in the United States and Canada.
The subscription service builds on a free news app that the company released in late 2015 and comes installed on the company’s iOS software. Apple said about five billion articles are read monthly on Apple News.
The price to be part of Apple’s paid news offering is steep. Apple’s 50 percent cut is higher than the 30 percent it usually takes from apps and subscriptions sold through its App Store. Publishers are also concerned that Apple will maintain access to important consumer data such as credit cards and email addresses as part of the deal.
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