Apple may be announcing its long-rumoured video-streaming service next month, and analysts are chewing over the implications.
One, Tim O’Shea of Jefferies, has published a report with some big numbers – but also some questions about the impact such a service would really have on Apple’s wider business. O’Shea suggested that Apple will charge $15 a month for the service, taking a 30% cut of the revenues (in traditional App Store style). He also noted that even if Apple signs up 250 million subscribers by 2023, that $13.5bn in annual revenues would be just a small fraction of the company’s overall sales. And also not enough to offset the decline in iPhone sales (he expects $30bn less of those this year alone, for comparison’s sake). “These iPhone declines are by far the dominant trend. Services at this point are not big enough to offset that pressure.”
One point that’s already been made: Apple’s video-streaming service won’t sit in a bubble in the longer term: the potential for some kind of more-expensive bundle with music, games and books/news is clear – as is the fact that this kind of bundle will only enhance customer loyalty – and thus support hardware sales.