Apple Grows Its Services by Partnering with Samsung, Others

Although Apple doesn’t have an official presence at CES, it still made news there, with companies announcing partnerships for iTunes, AirPlay 2 and HomeKit. The Silicon Valley firm is rumored to be rolling out a streaming video service in early 2019, with content from Oprah Winfrey, Reese Witherspoon, M. Night Shyamalan and Steven Spielberg. At CES 2019, Apple’s integration with third party platforms included TVs from Samsung, LG, Vizio and Sony. The move into content and services comes as Apple contends with lower iPhone sales.

CNET reports that Apple’s services business “generated over $10.8 billion in revenue during the holiday quarter, setting a quarterly record in every geographic segment.” Apple chief executive Tim Cook “said Apple is on track to double the size of that business from 2016 to 2020.” Apple’s services are buttressed by 330 million subscribers, “up 50 percent from the previous year,” which “translated to $37.2 billion in service sales, or 14 percent of overall revenue in fiscal 2018, which ended in September.”

But Apple can’t rely on subscriptions on its own devices; “it’s vital for its software to be available on non-Apple devices.” Apple has already made some steps in that direction, including an Apple Music app for Android, offered in beta in 2016. Last month, Apple debuted Apple Music for Amazon Echo speakers. “This is further evidence that Apple is willing to change its hardware-first approach and work with third parties to boost services revenues,” Loup Ventures analyst Gene Munster noted.

Although Apple and Samsung have been rivals for a decade, the two companies have partnered on the latter’s smart TVs, which will support iTunes movies and TV shows in spring this year. The TVs will “also support AirPlay 2, Apple’s upgraded Wi-Fi audio streaming technology, allowing customers to stream videos, music and other content directly to their TV from an Apple device.”

Other TV manufacturers partnering with Apple will allow consumers to “watch videos through an AirPlay link between an iPhone and a television.” This marks “the first time iTunes movies and TV shows are being made available on a streaming video device that isn’t made by Apple or isn’t a PC.”

The iTunes support will allow Samsung TV owners in more than 100 countries to access their iTunes library or buy and rent iTunes video content through their TVs. The capability will also be made available to 2018 models through a firmware update, Samsung said. Meanwhile, LG, Vizio and Sony announced that, “Apple’s AirPlay 2 and HomeKit are coming to their televisions.”

Vizio said “its new SmartCast 3.0 technology will support AirPlay 2 and HomeKit,” allowing users to stream 4K and Dolby Vision HDR videos, along with music and photos, from their Apple devices to their big screens, by tapping the AirPlay icon.

In audio, Samsung-owned Harman Kardon will unveil new Citation speakers (which come with Google Assistant built-in), which will be able to use “AirPlay on the speaker … to use Apple Music, take advantage of Apple’s multi-room audio capabilities and tap into Siri.”