Apple is making a big move into the streaming wars with the November 1st launch of Apple TV+.
The Big Picture: Apple generated $13.7B in profit last quarter, but iPhone sales dropped 9%. The iPhone is no longer a growth story, and the company is preparing for a future driven by services and/or subscription revenue.
Key details for Apple TV+:
1) No ads
2) Available in 100+ countries
3) $4.99 per month after free trial
4) $6B+ in original content spend
5) 9 original shows
6) No 3rd party content
Apple’s revenue from services (YoY growth):
1) 2016 – $24.3B
2) 2017 – $30.0B (↑ 23%)
3) 2018 – $37.2B (↑ 24%)
4) 2020P – $48.6B
Quick math on the potential opportunity for Apple TV+:
1) Global Apple customers – ≈ 900M
2) Conversion rate – 10%
3) The potential customer base for Apple TV+ – 90M
4) Monthly subscription cost – $10
5) Revenue/month – $900M
6) Revenue/year – $10.8B
More #1: Apple Plays the Underdog in Streaming Wars
More #2: Apple TV Plus Chiefs on Building the Ambitious Video Venture From Scratch
More #3: Inside Apple’s High-Flying Bid to Become a Streaming Giant
