Apple signed an agreement with Samsung for the use of iTunes streaming services on Samsung smart TVs, the latest deal to bolster the reach of its content and Services business in the face of weakening iPhone sales.
In a profit warning issued last week, CEO Tim Cook pointed to growth in its Services segment as one of the “many positives” from its fiscal Q1 2019 (covering the period to 29 December 2018).
The company slashed its financial projections for the fiscal year and revealed weak iPhone sales, however Cook hailed Services for booking record quarterly revenue across all of its markets. That part of the business generated over $10.8 billion during the quarter, up from $8.5 billion in the same quarter of the previous year.
Apple has long talked-up the importance of its Services business, which has come into increasingly sharp focus as news emerged of dropping hardware sales. The company said it is on track to meet its goal of doubling the size of Services between the years of 2016 and 2020.
The deal with Samsung will allow users of Samsung smart TVs to stream films and TV content from iTunes directly to selected TV sets from early 2019. It will also support Apple’s AirPlay2 audio, video and games streaming services.
The move essentially means content from Apple TV can be accessed on a Samsung product without the need for Apple’s own hardware. The two vendors have a history of intense rivalry, often ending in litigation.
Apple inked a similar partnership with Amazon in late 2018 to open the use of streaming service Apple Music to US Amazon Echo smart speakers. Although largely promoted to its existing hardware user-base, the music service is also available on Android devices.
In terms of its music software, the company has allowed third party usage for a number of years with Windows-based PCs able to use iTunes for more than 15 years.
Moor Insights and Strategy president Patrick Moorhead said in a series of tweets the latest deal was “more affirmation Apple is intent on driving its services cross-platform” and raises the question of whether “Apple is actually abandoning its end-to-end positioning for the sake of revenue growth.”
Analyst Paolo Pescatore noted: “Samsung is better placed than rivals to act as an aggregator given its broad distribution reach. For this reason, it will provide a much needed services revenue boost for Apple.”Subscribe to our daily newsletter Back