Apple Serves Us Some New Services

This week, we continue our return to the rushing roller coaster of tech releases and unveilings.  Apple held an event on Monday to unveil the new services they plan on adding to their growing business strategy.  

iPhone sales have stalled over the past couple years as their growing ubiquity has saturated the market.  People are keeping their phones longer and longer due to the growing costs of phones (interesting bit about phone costs, check out this video).  This has resulted in some of the worst fiscal results for Apple in decades, seeing negative year over year revenue growth in the first 3 quarters of 2016 and the last quarter of 2018 which had previously not happened since 2009.  This has stunned investors and left Apple presumably scrambling to reassure them and maintain their market dominance and position as perhaps the most lucrative tech company in the world. These new services are undoubtedly part of their strategy to accomplish this goal.

Oh yeah, and all the names start with Apple.

First up is Apple News+ (+ seems to also be a trend here).  This is Apple’s new magazine subscription service. They launched it with the event on Monday so it is currently available at $10 a month and offers users a vast library of magazines for the one low rate.  News+ will also keep track of what type of news you like and offer recommendations for magazines that would suit your style.  Interestingly, Apple stressed the idea that privacy is very important to them and stated that they will not collect information about what you are reading nor will such information be available to corporations or advertisers.  That’s really all; there really isn’t that much exciting stuff in their new news service.

Next is a much more exciting announcement.  Apple is introducing their new proprietary credit card.  Apple Pay is already quite successful but digital payment hasn’t caught on nearly as much as I think they wanted.  Their card deemed the Apple Card will be available this summer and only in the US and will offers up to 3% cash back.  The card is backed by Goldman Sachs and MasterCard. It is very digital forward, showing up in you Apple Wallet once you subscribe.  In the app, you can easily see your balance and how long until your next payment is due. This will also be intimately connected to Apple Pay evidenced by the removal of the ability to fund Apple Pay Cash through external credit cards.  Apple will also send you a physical titanium card in the mail once you subscribe. This closely resembles the credit card Amazon launched a couple years ago. It is strange to see (this is further discussed in this Verge article) Apple busying themselves with such an old and mostly crowded market like credit.  Generally, Apple only does things that sit on the forefront of innovation and they try to upend every market they enter so they can take full control (take a look at the tablet market).  In this case, it’s unclear how Apple really plans to differentiate themselves, unless they’re planning on continuing to ride the pure status of the Apple brand.

We talked last week about Google’s new Stadia cloud gaming service, and now we see Apple trying to expand their gaming game.  They announced Apple Arcade, which gives subscribers an extensive library of games they can play on any of their devices. It currently contains more than 100 games, but this number is sure to grow.  I actually think this is the most exciting of all of Apple’s announcements because none of the games in Apple Arcade will have any microtransactions or ads, giving users the clean and uninterrupted experience I personally crave in mobile games.  I think I’d be okay chipping in a little bit to have an endless supply of games without annoying ads. Apple has not announced the rate for this service yet.

Lastly, is Apple’s long awaited streaming service, Apple TV+.  TV+ will be a direct competitor to Netflix and Hulu, which is going to make this particular market very interesting.  Now that the Disney Fox merger has officially completed, Disney holds 60% stake in Hulu and still plans to release their proprietary streaming service.  That means there will be at least 4 major players in the video streaming sector and Netflix is going to have some real competition. This should lead to increased quality across all the services, but will certainly lead to increased customer frustration as they miss out on exclusives from any of the other subscriptions.  Apple is going to pull that string hard, already planning exclusive content with Oprah, Stephen Speilberg, and more Hollywood superstars. If you want to keep reading about all the details about TV+, I recommend this article from Business Insider, which summarizes it nicely.

That’s a very brief intro into all the new services Apple is planning, but the more important lesson here is the direction that Apple is taking its business and what that means for the rest of the tech industry which was already gravitating toward streaming services.