Bloomberg: Apple’s new services show slow growth in the first few quarters


Tuesday reporter from Apple Mark Gourmet presented a Bloomberg story that summarizes what investors perceive as Apple’s weak return to TV + services, Arcade, News + and Apple Card after the first few quarters on the market.

Apple is expected to report the results at July 30 for the third financial quarter and analysts predict service revenue of $ 13.1 billion, up to 15% comparing with the previous year. However, most of that revenue will come from existing services such as the App Store and licensing offerings, rather than new offerings.

Apple’s video + TV streaming service entered an already crowded market when it launched last November, and Gourmet cites analyst estimates earlier this year that less than 15% of eligible customers have signed up despite Apple offering one year free trial with purchase of iPhone or other hardware.

It’s a similar story for Apple’s Arcade subscription service, which launched last September. Apple reportedly recently changed its strategy and canceled contracts for certain games during development as it looked for other games it thought would keep subscribers.

Some developers speculate that Apple’s change in strategy indicates weaker-than-expected subscriber growth, and Apple recently also started offering some people a free trial for a second month, possibly indicating that users won’t remain subscribers. over a fairly long period of time.

For “Apple Card”The Goldman Sachs Group has amassed nearly $ 2 billion in credit lines since its launch last August, which is part of other joint cards, according to Nilson’s February update to its report.

However, the poorest service provider is believed to be Apple News +, which launched in March 2019.

Apple News‌‌ + provides access to hundreds of magazines along with subscription news to the Wall Street Journal and Los Angeles Times, but has not kept up with consumers, possibly due to lack of access to publications such as The New York Times and The Washington Post, which declined to subscribe agreements with Apple.

February also Apple corporate manager for “Apple News” + leaves the company in less than a year after the launch of the service $ 9.99 per month.

That leaves the “App Store” where Apple’s real growth in service revenue lies. Apple receives a 30 percent discount on all paid apps downloaded from the “App Store” and in-app purchases. It also charges 30 percent of the in-app subscription, dropping to 15 percent after the first year.

“App Store” earned $ 32.8 billion in the first half of 2020 for developers, more than 20% more than the previous year, according to Sensor Tower estimates cited by Gurman. Meanwhile, paid subscriptions exceeded 515 million in the second fiscal quarter.

However, as part of an ongoing antitrust investigation into Apple’s “App Store” policy, US antitrust authorities are examining the 30 percent cut Apple gets from in-app subscriptions. Over the past few months, government lawyers have met with developers, and developers have been asked questions about Apple’s subscription policies.

Apple CEO Tim Cook and other CTOs are set to take part in an antitrust hearing at the US Judiciary’s antitrust subcommittee on Wednesday to investigate competition in digital markets. It remains to be seen whether Apple’s App Store revenue stream will receive a major blow following the investigation.


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