Apple event: Apple in Flatrate Fever with Apple TV + and Apple News +

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isIt doesn't take long for guests to suspect they are seeing something special. While Tim Cook takes the stage on Monday, a different show begins from what the public is used to. This time the Apple boss does not keep any new iPhone in order. It also does not show new MacBooks or iPads.

And there is no "One More Thing", no surprise at the end of the presentation, which in the past often revealed a new gadget. After 110 minutes on Monday at the Steve Jobs Theater in the Cupertino headquarters in California, it's clear: it's time to change. Apple is in the middle of a strategic swing.

Instead of data on gigabytes and pixels, Apple shows on stage where the group sees an important part of its future: in Hollywood. Never before has it been so much prominence in the world of cinema and entertainment in an Apple presentation. Apple really wanted to show the company the cooperation.

There was also Bibo from "Sesame Street"

Viewers could quickly lose track of staged celebrity on stage: director Steven Spielberg left the stage for Reese Witherspoon and Jennifer Aniston, along with Steve Carell to promote the joint "Morning Show" project.

Then it went on every minute. After Jason Momoa and Alfre Woodard, Kumail Nanjiani and Sesame Street Bibo followed the example to make room for JJ Abrams and Sara Bareilles. Eventually, Oprah Winfrey introduced herself.

Apple Streaming TV

Steve Carell, Reese Witherspoon and Jennifer Aniston

Source: AP / Tony Avelar

"His show time" was already on the invitation for Apple's presentation. And in the end, the iPhone group leaves no doubt: it wants to be involved in the entertainment world in the future. He wants to produce series and films and sell them to the spectators. For over a billion dollars, Apple has commissioned TV shows and made purchases. Cook has been negotiating TV channels and content producers for years.

The flat video tariff, which Apple internally according to US media reports also "Netflix killer" is called, will start in autumn in more than 100 countries. The company did not mention a price for the service called Apple TV +. "This is the beginning of something very exciting," said Apple Cook CEO.

The business with the iPhone is finally

But Apple also wants to earn money for the content of others. Packaged in fixed-rate snacks, Apple wants to provide its users not only with devices, but also with what they consume on them. The company presented its redesigned TV app, where users can book individual flat rates from services like Cinemax and Sundance Now or from US broadcasters HBO, Starz and Showtime. Apple presented 26 such partners.

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What happens with Apple? The transformation of the group has a simple reason: the iPhone business is finally finished. The previous growth rates of the main revenue provider – the iPhone represents over 60% of the business – have passed. For the first time in more than ten years, the group's turnover and profit fell during the last quarter of Christmas. And at the beginning of the year, Apple had to lower its quarterly outlook for the first time in almost 20 years.

But the content business is nothing but a desperate act. Apple has rather come to taste. No other segment is growing as fast with the company as the services, which include the AppStore, Apple Music or cloud offerings. Last year, the division increased by a third to almost $ 40 billion and now represents around 15% of the Group's sales.

In the recent quarter alone, they were nearly $ 11 billion. However, payments in this segment, which are made by Google, so that Apple pre-sets the search engine on its devices.

Source: Infographic WORLD

Meanwhile, Apple also points out how profitable the services business is. While Apple's hardware margin is 34%, service has recently been 63%. Two years ago, Apple CEO Cook had issued an ambitious goal. By 2020, service revenues should double to $ 50 billion. In comparison, Netflix returned $ 16 billion last year.

Apple offers its users cloud storage for a monthly fee. Its Apple Music streaming service now has over 50 million subscribers. For all the services together, Apple has registered the last 360 million subscriptions, of which 120 million have been added within a year. Apple wants to count half a billion subscriptions by 2020.

A ride is almost impossible for Apple

Apple's latest flatrate will fuel this growth. Daniel Ives, a technology analyst with US investment firm Wedbush, talks about a possible "game change". The new streaming service could earn 100 million new subscribers within three years. Over time, he was able to contribute $ 7 to $ 10 billion to sales.

In reality, the potential is difficult to assess. Apple refers to the number of users. About 1.4 million iPhones, iPads and Macs are in use, including over 900 million iPhones. No other supplier can access this range.

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A ride through is almost impossible for Apple, the market is too competitive. In streaming music Spotify is well ahead of Apple Music with 96 million paid subscriptions. And when it comes to video streaming, Netflix and Amazon Prime have a big advantage. Netflix has around 140 million users worldwide.

Both companies have come to terms with Apple, a sign that they are ready to defend themselves. Spotify has also recently filed an EU antitrust complaint against Apple. As a platform operator, Apple gets "unfair advantages". In fact, Apple charges 30 percent of subscription fees in the first year when Spotify wins its customers directly on Apple devices. In the second year, there are still 15 percent. On the contrary, Netflix also resists. From the beginning of the year, Netflix subscriptions can no longer be completed via the Apple AppStore.

Great competition for Apple's streaming service

In the film and series streaming market, it's getting closer. Netflix, Amazon and Hulu are fighting for the same users in the United States. In other markets, such as Germany, other suppliers are also active, for example Sky. Broadcasters and producers have their own streaming services or plan them. This includes HBO Now. Warner Media and Disney want to launch the offers by the end of the year. Disney then takes its content, including all Lucas Arts films and the 21st Century Fox movie pool, on its platform.

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ILLUSTRATION - For the assistance service of Julian Hilgers from 14 February 2019: A suggestion on the remote control and already the enjoyment of the film can begin. The fact that the content can be retrieved on a time-independent basis is an advantage of streaming services. Photo: Christin Klose / dpa-tmn - free only for recipients of the thematic service dpa +++ dpa Topic +++

So there are many alternatives to Apple services. Apple's $ 1 billion investment in domestic production touches on the budgets that Netflix and Amazon spend on content, for example. Netflix alone expects to spend $ 15 billion this year, 80% of which will be on its own series and movies.

For Netflix, such high charges are only useful if the content can be distributed to as many users as possible. In the past, Apple was quite alien to this philosophy, the group had in particular the users of their devices in mind. This is slowly changing now. So the group brought Apple Music to the United States last year on Amazon's echo speakers.

Apple Vice President Peter Stern presents the "Netflix Killer"

Peter Stern (vice president of Apple Services) introduced the "killer Netflix"

Source: AP / Tony Avelar

And at the Consumer Electronics Show (CES) in January, Apple and Samsung announced that iTunes will also be available on Samsung TVs in the future. "On our Smart TVs, we see a rapid growth in traffic to streaming services," says Samsung Leif-Erik Lindner manager. "The rapid availability of new and popular streaming services has become an important purchase criterion and partnerships with streaming services are a fundamental element of our strategy."

The group's new TV app will soon be available on other devices, including LG, Sony and Vizio TVs and Roku and Amazon Fire TV set-top boxes, as well as Samsung TVs.

Flat Gaming with over 100 exclusive games

But Apple does not stop at flat rates for TV shows and music. In the future, there should also be a gaming apartment, called Apple Arcade, which will be available in over 150 countries from the autumn.

In the beginning there should be more than 100 new and exclusive games that users can play with a monthly subscription fee. The price for this, however, Apple has not yet called.

Compared to video streaming, the market for game subscriptions is not yet competitive. But even here, several companies have announced that they want to offer games via the cloud, in the last week that Google has presented for its Stadia platform. Microsoft, game developer Electronic Arts and technology group Nvidia are working on similar services or are already testing them.

Flatrate news not yet in Germany

Apple could also have Apple with its new flat rate for ten dollars a month, because Apple reportedly wants to pass only 50% of the subscription fees to publishers. New York Times editor-in-chief Mark Thompson warned colleagues to provide their content for the service. C & # 39; is the risk of losing control of your product. For now, Apple's flatrate will be available in the United States, there are no details for the beginning of Germany.

While the "New York Times" and the "Washington Post" would give Apple a basket, the Wall Street Journal (WSJ) and the Los Angeles Times will be part of the new offer called Apple News +. It is not risky. Of its digital users, the WSJ charges $ 39 a month. It is quite possible that these customers are now switching to the Apple flat rate, which costs only a quarter of that.

The fact that Apple is able to offer the content of over 300 magazines in the beginning is mainly due to the acquisition of Texture from last year. The company already had a similar offer for $ 10 a month. With the purchase Apple has, after a report from the "Wall Street Journal", access to most of the major North American magazines for a period ranging from 5 to 20 years. Apple also maintains a 50 percent interest in contracts with publishers such as Hearst Magazine and Condé Nast.

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The offer is now available in the United States and Canada, and in Canada the newspaper "The Star" and over 30 Canadian magazines are part of the service. Australia should follow this year, as well as the United Kingdom. Later, other European countries are added. Information on the market launch in Germany Apple has not done.

Obviously, Apple's offensive content does not mean a departure from previous offers. IPhone sales are still very profitable. But with services, Cook builds another support point, which guarantees risk diversification. Ultimately, subscription services will also lead to greater user engagement with their Apple devices. So Apple would have a double advantage.

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