Last month, Apple CEO Tim Cook announced
a new direction for his company. Yes, it will still sell iPhones,
Macs and AirPods,
but now it will focus on the stuff you watch, listen and play on those devices
too.
a new direction for his company. Yes, it will still sell iPhones,
Macs and AirPods,
but now it will focus on the stuff you watch, listen and play on those devices
too.
Apple TV Plus,
a video streaming service, Apple Arcade,
a paid package of games and Apple News Plus, a subscription service to
articles from about 300 magazines and newspapers, are the future of Apple’s
growth. The company’s even creating Apple Card, a credit card, with cash
back for people who buy products directly from the company.
a video streaming service, Apple Arcade,
a paid package of games and Apple News Plus, a subscription service to
articles from about 300 magazines and newspapers, are the future of Apple’s
growth. The company’s even creating Apple Card, a credit card, with cash
back for people who buy products directly from the company.
“For
decades, Apple’s been creating world-class hardware and world-class
software,” Cook said. Now it’s going to tackle streaming and gaming
services too. “It’s unlike anything that’s been done before.”
decades, Apple’s been creating world-class hardware and world-class
software,” Cook said. Now it’s going to tackle streaming and gaming
services too. “It’s unlike anything that’s been done before.”
He even
brought TV legend Oprah on stage to talk up her planned documentaries and
programs for Apple.
brought TV legend Oprah on stage to talk up her planned documentaries and
programs for Apple.
Whether Apple
can pull of this remaking of its business is an open question. Investors so far
are cautiously optimistic, pushing Apple’s shares up more than 8% since the
March announcement.
can pull of this remaking of its business is an open question. Investors so far
are cautiously optimistic, pushing Apple’s shares up more than 8% since the
March announcement.
“Video
streaming is not going to save shares of [Apple] if the iPhone marketdeclines,” Chatham Road Partners analyst Colin Gillis said in
March. “Apple remains the iPhone company.”
streaming is not going to save shares of [Apple] if the iPhone marketdeclines,” Chatham Road Partners analyst Colin Gillis said in
March. “Apple remains the iPhone company.”
Which is why
when Apple announces its second quarter earnings Tuesday, we’ll be looking for
more signs of what the future will bring than how many iPhones it sold between
January and March. Sure, it’ll be nice to get a look into Apple’s business, in
which analysts expect the company to announce $11.1 billion in profits on $57.4
billion in sales. But Apple no longer reports how many iPhones, Macs or iPads it’s
sold, putting more pressure on the company to show impressive sales and
profits. By the holidays, those results will include its new services.
when Apple announces its second quarter earnings Tuesday, we’ll be looking for
more signs of what the future will bring than how many iPhones it sold between
January and March. Sure, it’ll be nice to get a look into Apple’s business, in
which analysts expect the company to announce $11.1 billion in profits on $57.4
billion in sales. But Apple no longer reports how many iPhones, Macs or iPads it’s
sold, putting more pressure on the company to show impressive sales and
profits. By the holidays, those results will include its new services.
So far,
though, Apple hasn’t said much about how its existing services have fared.
Apple News Plus, which launched in March for $9.99 a month, is the only service
that’s been made publicly available so far, and it’s estimated to have netted 200,000subscribers in its first two days. That’s still far below
publications like The New York Times, which counted more than 3 million digitalsubscribers at the end of last year, though of course Apple’s just
at its start. Apple TV Plus, Apple Arcade and Apple Card aren’t launching until
later this year.One
other thing that could impact Apple’s results is a settlement with chip giant Qualcomm,
which came earlier this month after a series of dramatic courtroom battles.
Qualcomm’s technology powers cellular connections for many of the world’s phones.
The settlement included a payment from Apple to Qualcomm, though we don’t know howmuch, and an agreement for Apple to buy Qualcomm chips.
though, Apple hasn’t said much about how its existing services have fared.
Apple News Plus, which launched in March for $9.99 a month, is the only service
that’s been made publicly available so far, and it’s estimated to have netted 200,000subscribers in its first two days. That’s still far below
publications like The New York Times, which counted more than 3 million digitalsubscribers at the end of last year, though of course Apple’s just
at its start. Apple TV Plus, Apple Arcade and Apple Card aren’t launching until
later this year.One
other thing that could impact Apple’s results is a settlement with chip giant Qualcomm,
which came earlier this month after a series of dramatic courtroom battles.
Qualcomm’s technology powers cellular connections for many of the world’s phones.
The settlement included a payment from Apple to Qualcomm, though we don’t know howmuch, and an agreement for Apple to buy Qualcomm chips.
Some analysts believe this could drag Apple’s profits, though how
much is unclear.
much is unclear.
“Investors still don’t fully appreciate the strength of
Apple’s platform,” Morgan Stanley analyst Katy Huberty wrote
in a recent message to investors.
Apple’s platform,” Morgan Stanley analyst Katy Huberty wrote
in a recent message to investors.