Analyst estimates Apple will charge $15 per month for streaming video service

“Tim O’Shea, an analyst who covers the iPhone maker for Jefferies… estimated that if Apple’s video service had 250 million subscribers in 2023, it still would account for only about 5% of the company’s revenue that year — and wouldn’t make up for its declining smartphone sales,” Troy Wolverton writes for Business Insider. “By point of reference, after offering streaming video for 12 years, Netflix has 139 million subscribers.”
“To figure out the potential of the video service, which Apple is widely expected to launch next month, O’Shea estimated that Apple would charge customers $15 a month,” Wolverton writes. “If the service is extremely successful and attracts 250 million subscribers, it would yield $13.5 billion in revenue for Apple. That’s nothing to sneeze at. After all, Netflix’s total sales last year were $15.8 billion. But in the context of Apple, such a figure would be just a drop in the bucket. In fiscal 2018, the company posted revenue of $265 billion.”
“Apple has shown with its Apple Music service that it can grow such offerings relatively quickly… Apple Music has 50 million paid subscribers, a total it reached much quicker than the market leader, Spotify, he said,” Wolverton writes. “Apple’s smartphone sales accounted for $167 billion in sales last year, and the iPhone may be the biggest product business of any company ever, O’Shea said. Because it’s so huge, even a small percentage drop in its sales can more than wipe out big gains in other parts of Apple’s business.”
Read more in the full article here.
MacDailyNews Take: Once the lengthening iPhone replacement cycle stabilizes, Apple will have a solid base of massive revenue that just happens as long as they can manage to keep iPhone fresh with regularity. Cough * Mac * cough. That coughed, even with some pronounced mismanagement on the Mac side of things over the past 5+ years, Apple still has a solid base of Mac revenue that just happens (to just could’ve been and should be larger today than it is).
As for the $15/month estimate, we’ll wait and see what types of bundles, if any, that Apple comes up with. We’d sign up for a decently-priced bundle that includes Apple Music, Apple Video, and iCloud storage in a heartbeat.
SEE ALSO:
Apple’s March 25th event could bring the big bundle that beats Netflix – February 17, 2019
Apple analysts are bullish about rumored ‘Apple Prime’ media bundle – February 14, 2019
Apple plans star-studded March 25th event to unveil video and news subscription services – February 13, 2019
Apple to hold special media event on March 25th – February 12, 2019
Imagining an Apple All Access plan: What if Apple offered iPhone, iCloud, Apple Music, and more all for a single monthly fee? – August 29, 2018
A bundled media subscription would be good news for Apple users and for Apple itself – June 29, 2018
Apple reportedly considering subscription bundle of Apple Music, News and original video content – June 28, 2018
Apple is building a media platform like we’ve never seen before – June 27, 2018
Here’s how much Apple could make from streaming – June 27, 2018
Apple’s next $10 billion frontier is content creation – June 25, 2018
Apple intends to beat Netflix on price with standalone subscription to original content – June 19, 2018