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When Apple unveiled its redeveloped Apple TV decoder in 2015, the update was touted as a dramatic upgrade of support. "And our vision of television is simple and perhaps provocative," said CEO Tim Cook during the company's speech in September this year. "We believe that the future of television lies in applications."
Today, more than three years later, Apple may be preparing to give the world an even clearer picture of what this statement means. On March 25, the company is scheduled to host an event at the Steve Jobs Theater, on its Apple Park campus, where it is expected to unveil a new streaming video service, among other announcements. The service will likely be integrated with Apple products and will provide access to Apple's original programming as well as other giants' broadcasts of media, such as CBS, Showtime and HBO, among others.
Apple was the pioneer of the modern smartphone at the launch of the iPhone in 2007, and its original iPad set the standard for modern tablets in 2010. But it struggles to produce a similar impact with its latest hardware products.
The Apple Watch, which is now the most popular smart watch in the world, was slower to burn than a night changer: some critics have criticized the first generation of Apple Watch for not in do enough. Average consumers were also not impressed by the watch, as more than half of those polled in a 2016 poll by the Fluent advertising agency thought the watch was a flop. (One could argue that the now-defunct Pebble, which has collected more than $ 10 million on Kickstarter and remains one of the platform's most-funded projects, was the first smartwatch to excite the masses in terms of portable technology).
Alexa and Google Assistant of Amazon have already established themselves as the most popular digital assistants at home. In the fourth quarter of 2018, Amazon Echo accounted for 35.5% of smart speaker shipments, compared to 30% for Google Home devices, according to the findings of Strategy Analytics released by VentureBeat. Apple's HomePod speaker accounts for only 4.1% of the market, although shipments increased 45% qoq.
This leaves many investors, analysts and industry observers wondering what will be the next step for Apple. And according to the latest reports, the answer is clearly the new digital services. Strengthening its service business is of particular importance to Apple in 2019 due to slower iPhone sales – and global smartphone sales.
In its January earnings report, Apple announced that iPhone sales in the growing holiday quarter were down 15 percent from a year ago. The company attributed this decline to macroeconomic factors and the fact that consumers are keeping their phones longer.
But Apple's service sector, which includes products such as the App Store, Apple Pay and Apple Music, has been the focus of the company's results. It rose 19% in December and reached an all-time high of $ 10.9 billion in revenue.
Aside from commercial interests, Apple's long-awaited presence in the streaming video market will be critical for the company to maintain its reputation as an innovator. The smartphone market has matured and next-generation technologies that Apple would work on look like augmented reality glasses and a new automotive platform is unlikely to be ready in the near future.
The new smartphone models introduced by industry giants such as Apple and Samsung have appeared more than revolutionary in recent years, the most significant advances being made in the form of upgrades. cameras and remodeled designs. At the same time, smartphones are becoming more expensive. even the entry-level iPhone XR costs around $ 50 more than the iPhone 8 of 2017, which started at $ 699. This makes it increasingly difficult for companies like Apple to convince consumers to switch to new devices.
Apple is also still preparing its plan for everything that, in its opinion, will be the next evolution of the personal computer, whether it is augmented reality glasses or video conferencing technologies. autonomous car. The company was apparently preparing to launch an augmented reality headset in 2020, which would run on a new chipset and operating system designed by Apple, but this schedule could change, according to Bloomberg.
The company would also devote resources to building an autonomous driving software as part of its Project Titan initiative, as Bloomberg also said. But we do not know exactly when the company will publish the products resulting from this project. Apple had originally planned to design an electric vehicle that would be launched by 2020, but the group turned to self-driving software in 2016, the report says. Apple also fired 190 employees of its Project Titan division last month.
This means that Apple may have to prove that it can do more with the products that it already sells, and launching a new video streaming service would definitely be a way to do it. But as a newcomer to space, the company will undoubtedly face stiff competition from competitors like Netflix and Amazon, especially with respect to content.
According to the Wall Street Journal, Apple is developing its own programs for this service, which should be presented at its event on March 25. He invested $ 1 billion in original content. Apple signed a multi-year deal with Oprah and would work with Mr. Night Shyamalan on a thriller and Steven Spielberg on a revival of the anthology series Amazing Stories, according to Variety and The Wall Street Journal. He also acquired James Corden's Carpool karaoke in 2016.
But a billion dollars is only a tiny part of what Netflix spends on programming, as the company said in its latest financial results report, that it spent $ 12.04 billion. in content last year. Wedbush Securities analyst Daniel Ives recently asked Apple to continue its content acquisitions to catch up with a note to investors on Feb. 21.
"It's time for Apple to rip the bandage and finally create meaningful content [mergers and acquisitions] with the mature landscape, "writes Ives in the note. Otherwise, it will be a major strategic mistake that will haunt the company for years to come because content is the essential fuel in the service engine and currently absent from the portfolio. "
Still, Apple has a key advantage that Amazon and Netflix lack: the iPhone. Apple recently announced that there were now 900 million active iPhones in the world. And if Apple incorporates this new streaming app into iPhones, iPads and Apple TVs as expected, it will certainly have a wide distribution channel. Wedbush predicts that the Apple streaming service could have 100 million subscribers by three to five years ago it turns out to be a hit.
Apple may have established its vision of television in 2015, proving that Apple TV is no longer a "hobby". But if it succeeds, this new video service will be the missing piece of puzzle needed to accomplish this mission. And it's more important than ever for Apple.
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