Apple Inc, maker of iPhone, unveiled a makeover of itself on Monday as an entertainment and financial services company as it launched a streaming television service, a credit card and an online gaming arcade.
With appearances by Oprah Winfrey and Steven Spielberg, the world’s second-most valuable technology company lifted the curtain on a television and movie subscription service called Apple TV+ that will stream original television shows and movies.
The star-studded lineup failed to excite investors, who sent Apple shares down 1.2 percent.
The company’s long-expected plunge into the streaming video war is years behind leaders Netflix Inc and Amazon.com Inc. Apple left out key details such as pricing, making it difficult to judge how its service will stack up against competitors.
“While Apple may introduce a bigger roster of original content than Amazon and Netflix during their respective launches, the streaming market has arguably already reached a level of saturation and consumer fatigue in the United States,” said Colin Gillis, an analyst at Chatham Road Partners.
The programming will come through a revamped television-watching app for users of Apple’s 1.4 billion gadgets worldwide, as well as owners of smart TVs and other devices.
Apple is taking a different approach by offering paid “channels” from AT&T Inc’s HBO, Lions Gate Entertainment’s Starz and CBS Corp’s Showtime, alongside its own content.
Its revamped app for subscribing to channels from others will come out in May, but Apple’s own original shows will not arrive until autumn, with pricing not yet announced. Apple said both its TV+ shows and the new version of the TV app will be available in more than 100 countries.
Apple also introduced a credit card, a digital video game arcade, and added hundreds of magazines to its news app at an event at its Cupertino, California, headquarters.
The launches come as Apple struggles with falling iPhone sales, which has prompted the company to turn more of its attention to services that provide regular subscription revenue.
Tim Cook, CEO of Apple (L) and Oprah Winfrey hug during an Apple special event at the Steve Jobs Theater in Cupertino, California, U.S., March 25, 2019. REUTERS/Stephen Lam
Hollywood celebrities helped debut the revamped television offering. Apple has commissioned programming from Jennifer Aniston, Reese Witherspoon, Winfrey, Spielberg and others.
Winfrey, who announced a global book club and two documentaries, said she was drawn to Apple in part by its reach. “They’re in a billion pockets, y’all,” she said, referring to Apple’s ubiquitous devices.
Alongside its own iPhones, iPads and iMacs, Apple will make the programming widely available through smart TVs and devices from Roku Inc and others, departing from the past where it has tended to keep content exclusively on its own hardware.
Throughout the presentation, Apple executives stressed privacy protections for consumers as they shop and consume content.
“The most important point for today was advertising and privacy,” said D.A. Davidson & Co analyst Thomas Forte.
Apple, second only to Microsoft Corp in market value among tech giants, led off the event with an announcement that its free news app will now come in a paid-subscription version, called Apple News+, which curates a range of news articles and will include 300 magazines including National Geographic, People, Popular Science, Billboard and the New Yorker. Apple said it would cost $9.99 a month.
Apple then introduced a titanium, laser-etched Apple Card backed by Goldman Sachs Group Inc and Mastercard Inc that can track spending across devices and pay daily cash back on purchases. Cook said Apple Pay will be available in more than 40 countries by the end of the year.
The company also introduced Apple Arcade, a game subscription service that will work on phones, tablets and desktop computers and include games from a range of developers.
Apple said the gaming service will feature more than 100 exclusive titles from gaming partners such as Annapurna Interactive and that the service will arrive this autumn.
As with its original content service, Apple did not say how much its gaming service will cost consumers.
With its new media push, Apple joins a crowded field where Amazon.com’s Prime Video and Netflix have spent heavily to capture viewer attention and dollars with award-winning series and films.
Apple’s primarily family-friendly content, likely to appeal to young audiences, also sets the stage for a rivalry with Walt Disney Co.
The big tech war for viewers ignited a consolidation wave among traditional media companies preparing to join the fray. Disney, which bought 21st Century Fox, and AT&T, which purchased Time Warner, plan to launch or test new streaming video services this year.
Revenue from Apple’s services – which include the App Store, iCloud and content businesses such as Apple Music – grew 24 percent to $37.1 billion in fiscal 2018. The segment accounted for only about 14 percent of Apple’s overall $265.6 billion in revenue, but investors have pinned their hopes for growth on it.