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SECTOR FOCUS Digital Media: Apple’s new core business?

iPhone: one of the few bits of tech to really change the world

Apple long ago ceased to be a company that sold just computers and smartphones. With the launch of iTunes in 2001, Apple began a move into the content business. Two decades later its Music, Podcasts and TV apps are a central part of the Apple ecosystem, with its books and aggregated news services also playing an increasing role in the company’s fortunes.

When first launched, Apple’s iTunes was primarily a simple, and revolutionary computer-based music player and browser. As use of digital media has expanded, iTunes has morphed into a multimedia content manager and Apple has shifted to place a growing emphasis on media content – especially based around subscription models. 

In 2015, Apple launched Apple Music, a music and video service that reflected consumers’ shift to streaming rather than downloading files. By 2021, Apple Music had 98 million subscribers, generating $4.1bn in revenue in 2020, accounting for 7.6% of Apple’s total services revenue. 

In epublishing, Apple’s books service and its News+ offering have, between them, an estimated 125 million users, with some 112 million paid news subscribers. This marks out its epublishing arm as something of a dark horse in the company, outstripping users of its more widely publicised Apple TV+ streaming service.

In fact, Apple’s play for the VOD market is still in a nascent phase, with an estimated 75 million users globally, 50 million of them accessing the service through some kind of promotion.

Despite these figures and despite aggressive marketing, Apple has not had things all its own way. Spotify continues to be more popular than Apple Music in Europe, for example. 

Looking across Apple’s wider media offering, there’s a sense that competitors have often stolen a march on the company. In the UK, the Apple TV+ service costs £4.99 per month and, while shows such as Ted Lasso and For All Mankind have been hits, it has yet to give the world a blockbuster show such as Netflix’s The Crown or Stranger Things. In short, Apple has yet to prove it has mastered the content business, for all that its Apple TV hardware regularly attracts rave reviews, although tech such as Amazon’s Firestick and the growing number of smart TVs on the market are giving it a run for its money.

Read more in the RetailX Digital Media Sector report

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