Apple has been “softening” in recent years, trying to increase the proportion of software with higher gross margins in the business landscape, while iPhone sales slowdown and revenue decline, accelerating Apple’s transition to service.
According to Venturebeat, Apple is promoting two services: Apple News, a paid news subscription service, and video subscription service for iOS devices and Apple TV.
BuzzFeed, a US news aggregator, quoted people familiar with the matter as saying that Apple plans to hold a press conference on March 25th to launch Apple News, but will not release hardware products. According to CNBC, streaming services may be launched in April or early May, and the core will be Apple’s own original programs and movies, at least some of which will be provided free of charge to users of Apple devices.
However, both services have caused some controversy. Whether it’s news or streaming subscription services, revenue sharing is one of the key issues.
The Wall Street Journal reported that Apple hopes to monopolize 50% of Apple News’s revenue. First-line news sites like The New York Times and The Washington Post have not yet agreed to authorize it. Publishers are also worried about not being able to pass Apple’s news service. Access to subscriber data makes it impossible to obtain user email and credit card information.
In the streaming media business, according to CNBC reports, Netflix will not support this service, and HBO may or may not join. According to people familiar with the matter, Apple plans to draw a 30% revenue share for users who subscribe to online video services through its streaming services. Currently, Apple only draws 15% of revenue share for users who subscribe to streaming media applications such as HBO Now and Netflix through the App Store. This means that Apple’s service will double the amount of “snake wool”, which may affect the income of streaming media companies.
Recently, research firm Bernstein released a report saying that only 16% of consumers will change their iPhones this year, which means that the frequency of Apple users changing the frequency will affect Apple’s performance in the next two years. The Bay Street Institute, which tracks the sale of smartphones, said that an iPhone was changed every two years in about 15 years, and it has now been extended to roughly three years, and the follow-up may become longer.
Apple’s replacement frequency has dropped, and Apple’s mobile phone pricing has gradually approached the ceiling of consumer spending power, and Apple has to find new business support points and growth points.
In the current business landscape, regardless of the volume and growth rate of revenue, services have the greatest potential. In the fourth quarter, the financial report showed that service revenue broke through tens of billions of dollars for the first time. This scale is second only to the iPhone in Apple’s major business, and it has maintained a high growth rate in recent years, with a year-on-year increase of 19% in the fourth quarter. Gross profit margin is as high as 63%.