Get used to a new Apple
The biggest news out of CES so far this year is that Apple iTunes is coming to new Samsung TVs. It’s been met with surprise and confusion in some quarters, but the reasoning here is really very simple.
Let’s set aside the fact that ‘iTunes’ is a terrible name for something people are going to be buying and watching video through. And let’s also set aside that the 'iTunes’ brand is tarnished by the clunky, dated, bloated software that bears its name.
Instead, let’s look at what’s happening here. As we saw last week, Apple is facing a challenging future for its biggest product line, the iPhone. While it still sells amazingly well for a smartphone, growth is non-existent as people upgrade less frequently than they used to, and market forces in countries like China play against Apple.
This is forcing Apple to boost the importance of its services business. This is something I discussed in a members-only edition last week – Apple needs to get more people paying monthly fees for things like streaming music and photo library management.
The iTunes Store, and cloud access to your iTunes library, is part of that services portfolio. Until now, you needed either an Apple TV box plugged into your television, or support for AirPlay so you could wirelessly play content from your Apple devices. Now, Samsung TVs will have everything you need built in.
Nilay Patel at The Verge has 5 big questions about Apple putting iTunes on smart TVs
. He asks 'Why would any Samsung smart TV owner buy an Apple TV box now?’
The answer is 'Apple knows the Apple TV isn’t a particularly compelling piece of kit – it’s what you can do with it that’s important.’ And if it can bring that offering to other places, meaning Apple takes a cut of transactions in more places, then that’s more valuable than waiting for people to buy an Apple TV box.
Patel also asks 'Why didn’t Apple just build a TV that runs its software?’ Apple certainly could do that but TVs are a low-margin product, and even with the 'Apple tax’ (whereby people are willing to pay more more for Apple products), it would be a lot of work to get a product into stores when it doesn’t need to – because we need to think of everything Apple does for consumers in the future through the lens of its services business.
'Apple the services business’ will take a bit of getting used to, but really it’s simple, the company is just going to be making more of a push to generate more revenue from more places, more often.
Next thing to look out for – will these Samsung TVs get Apple’s forthcoming streaming TV service?