Apple held an investor event today where they unveiled details about their new Service offerings:
· Apple News+ – $9.99/month news app w/ family sharing that includes WSJ, LA Times, 300+ magazines. Available today in US and Canada. Launching in Australia and UK later this year.
· Apple Card – new credit card in partnership with Goldman Sachs. No annual fees, no late fees and they said it would be a low interest rate. Also will include app that helps track purchases, pay balances and gives daily cash back ranging from 1% with physical card to 2% with Apple Pay and 3% on Apple purchases.
· Apple Arcade – subscription gaming service with exclusive content. Launches in over 100 countries in Fall 2019. Pricing not announced, but no ads and no in game purchases.
· Apple TV App – newly designed app for mobile and smart TVs that aggregates TV subscriptions from DirectTV, Amazon, Hulu, Showtime, HBO and more (Netflix did not sign on).
· Apple TV+ – New TV subscription offering with exclusive content. Launches in the Fall, pricing not announced yet. They had a long list of collaborators including Oprah, Steven Spielberg, Ron Howard, JJ Abrams, Steve Carell, Jennifer Aniston and lots more. Focused more on quality than on quantity. Spending a lot less on content than Netflix. Netflix spent about $12B last year. Amazon spent ~$4.5B and Apple is expected to spend closer to $2B… though that may go up.
Interestingly there was a lot of emphasis throughout the event that was clearly aimed at separating how Apple operates from how Facebook operates. The presentation on the news app was very focused on how the news would be high quality, curated content from reliable sources. And with each of the new products they emphasized privacy. They talked about how Apple would not collect data and often would not even have access to it. For instance with the TV app, the technology suggesting new TV shows based on viewing habits would sit on phones and not on Apple’s servers. With Apples News they won’t track what you read and they won’t allow advertisers to track you. They won’t track purchases with the Apple Card.
Sarah Kanwal
Equity Analyst, Director
Direct: 617.226.0022
Fax: 617.523.8118
Crestwood Advisors
One Liberty Square, Suite 500
Boston, MA 02109