Apple insists services are critical business; new numbers illustrate the scale

Apple shared some massive numbers across the services portfolio for the past year. In a snapshot, the tech giant reported 900 million paid subscriptions across its suite of services, which include Apple Music, Apple TV+ and the App Store globally. Given the importance the company places on the services umbrella (and the revenue it actually generates), this shouldn’t come as a surprise.

There are a number of Apple services, many of which you can think of as subscriptions that users can sign up for individually or as an alternative to a bundle called Apple One. There’s Apple Arcade cloud gaming, Apple Fitness+, Apple Pay as well as Apple News+, some of which aren’t available in all countries yet. These include iCloud+ storage and functionality like Private Relay to hide your Internet Protocol (IP) address, Hide My Email to hide your real email ID from potential mailing lists, and up to 2TB of cloud storage.

The number of App Stores keeps growing

Apple says that since 2008, $320 billion was sent to developers in the form of their earnings for apps, services and digital goods sold in the App Store and Apple Services portfolio. As a key element to this, the App Store continues to grow, and it now sees approximately 650 million visitors per week across the 175 regions it is now available in.

It’s been a tough year with the structure of the App Store under the regulatory lens. The US Justice Department may have a say in the ongoing Apple and Epic Games anti-trust appeal. Netherlands regulators forced Apple to comply with an anti-trust order that allows dating apps to use third-party payment systems for users.

Apple previously changed the share structure for each transaction that it holds for itself. Businesses and app developers that earned less than $1 million in the previous calendar year now face a 15% fee instead of 30%. Secondly, the in-app subscription also attracts 15% deduction instead of 30% in the first year.

Subsequently, the App Store pricing system was changed to introduce an additional 700 price points for developers. This means that the cost of an app, in-app purchase or subscription can now be as low as $0.29 or as high as $10,000 with rounded endings (eg $1.00) instead of $0.99 as has been the case until now.

The steady growth in users visiting the App Store reflects the numbers. In 2021, the company reported that the App Store ecosystem alone facilitated $643 billion in billings and sales during 2020, which coincided with the global pandemic and subsequent lockdowns. Before calculating Apple’s share of each transaction, this was a 24 percent year-over-year increase at the time.

“We believe that our products and services should be built for everyone. We believe that privacy is a fundamental human right, and that our highest obligation to our customers is security,” said Eddie Cue, Apple’s senior vice president of services. Q, an old hand at Apple, has completed 34 years at the company, and doesn’t shy away from crediting the success of various services to content creators globally.

“Never before have we enjoyed instant access to more cinematic original series, more engaging movies, more global music, more creative apps, more essential journalism and more immersive games and sports,” he added.

numbers testify to the growing importance

In the latest quarterly numbers, the importance of the services portfolio to Apple was again visible. Despite increases in subscription prices for the Apple Music, Apple TV+ and Apple One bundles in the period for which the numbers were in, the services still saw year-over-year revenue growth. In fact, $19.2 billion was a record in itself, up from $18.3 billion in the same period a year earlier.

Apple Music and Shazam play the right tune

Remember when the first Apple iPod was launched in 2001? It was a matter of 22 years ago. It was famous with the slogan “1000 songs in your pocket”. At the start of the year, the Apple Music streaming service has 100 million songs available within a single subscription. Many of them are also in high resolution lossless format. Apple says that spatial audio has grown by more than 1,000 percent in monthly plays.

In 2018, Apple spent $400 million to acquire Shazam, a popular music discovery app for smartphones. One thing Apple did soon was to make Shazam ad-free on iPhones and Android phones. In fact, the tech giant continues to work on ShazamKit, which invites third-party apps to integrate music recognition functionality into their apps and add it to Shazam’s catalog of tracks and albums.

Read also:Apple to replace key Broadcom chip with in-house design: Report

In 2022, which coincidentally marks 20 years of Shazam at our service for music discovery, the app will see its 70 billionth (th) successful Shazam search. The app has since added more national and city charts, some Apple Music has also painstakingly curated. In 2022, 40 million different songs were discovered by users on the app. In fact, Apple says that over one million artists got their first Shazam.

Combine movies, TV and sports

There are some interesting usage trends that have emerged across services. Apple TV+ content has received some significant awards through 2022, helping to create a very hot global video streaming map. Rivals, perhaps not in terms of library scale, but subscriptions and attention share, include Netflix, Amazon Video and Disney+, with local players also making their presence felt. Apple TV+ shows and movies, all originals, have been nominated 1,305 times and won 300 times.

Ted Lasso won the Emmy for Outstanding Comedy Series, while the Academy Award for Best Picture went to CODA, making Apple TV+ the first streaming platform to receive an Academy Award in this category. Apple TV+ made its first foray into the live sports space in the US with Friday Night Baseball and Major League Soccer. Whether Apple makes a similar move for streaming rights globally in 2023 remains to be seen.

In India, we are following a trend of separate rights being awarded for television broadcasting and internet streaming – something we have seen with the latest rights acquisition for the Indian Premier League T20 cricket tournament. This could give streaming platforms, including Amazon Prime Video (they’ve acquired the broadcast rights for cricket in New Zealand), a different pie to fight over.

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