Of the four services that Apple (AAPL 0.87%) unveiled earlier this year, two have now launched: Apple News+ and Apple Card. The other two, Apple Arcade and Apple TV+, are getting ready to debut, and new details are starting to emerge. The company is working hard to hit its ambitious goal of growing its services segment into a $50 billion business by 2020, which will include 500 million paid subscriptions. The tech titan has maintained steady growth in paid subscriptions, adding approximately 30 million paid subscriptions per quarter for the past seven quarters.
Can Apple Arcade and Apple TV+ help accelerate that growth?
Apple TV+: $10 per month
Bloomberg reported yesterday that Apple is targeting a November launch for Apple TV+ and is considering a price point of $10 per month. That latter data point has been the biggest question mark surrounding the service and will be instrumental in its success or failure, especially since Apple will have a smaller catalog compared to its rivals and hopes to justify the price by initially emphasizing quality over quantity.
Apple yesterday released a full-length trailer for The Morning Show, one of its flagship originals for the service starring Jennifer Aniston, Steve Carell, and Reese Witherspoon. The Cupertino tech giant has committed $300 million to the first two seasons of The Morning Show, according to Bloomberg.
The Mac maker has also reportedly boosted its original content budget, according to The Financial Times. Apple had originally allocated $1 billion, but has bumped that total up to $6 billion, according to the report.
The news comes as Disney (DIS -0.49%) is similarly ramping up for the highly anticipated launch of Disney+, which is also scheduled for November. Disney's catalog will include decades' worth of content and cost just $7 per month, before factoring in discounts for bundling or annual subscriptions. Compared to Apple TV+, consumers may perceive Disney+ to offer a much stronger value proposition.
Apple Arcade: $5 per month
9to5Mac reported yesterday that Apple Arcade may cost $5 per month, which it discovered after poking around code in the App Store. The company is reportedly investing $500 million into the effort, which will help fund development of high-quality mobile games that subscribers will have unfettered access to. iOS is the most lucrative mobile gaming platform in the world, and Apple hopes to offer a new monetization strategy for developers while boosting its subscription business.
Based on the rumored prices, that means that Apple could be generating as much as $45 per month from users that subscribe to its five core offerings.
Service |
Price per Month |
---|---|
Apple Music |
$10 per month |
Apple News+ |
$10 per month |
Apple Arcade |
$5 per month* |
Apple TV+ |
$10 per month* |
iCloud storage (2 GB) |
$10 per month |
The company continues to build out its first-party services portfolio, and the monthly costs are already starting to add up.