retail news in context, analysis with attitude

by Kevin Coupe

Barron's has a piece about how Apple, which has seen Mac and iPhone sales improve even as its iPad sales and overall sales in China have declined, is looking at its "services" segment as being a place where it can grow in the future.

According to the story, CEO Tim Cook wants to double that business over the next four years, and a big part of that could be original content that would compete against the original content offered by Amazon, Netflix, and even companies such as HBO.

“We have put our toe in the water with doing some original content for Apple Music,” he said, adding that Apple was “learning a lot about the original content business and thinking about ways that we could play in that ... We started the new Apple TV a year ago, and we’re pleased with how that platform has come along. We have more things planned for it but it’s come a long way in a year and it gives us a clear platform to build off of."

I've always been intrigued by the idea of Apple offering original content through its iTunes store. It simply seems to make sense, especially because it is competing for time and eyeballs with companies such as Amazon and Netflix that have been very successful - and spent a lot of money - doing the same thing. I think private label content could end up being as important to Apple as its proprietary hardware and software ... if it chooses its projects carefully and with good taste, it could end up being both a source of revenue and consumer loyalty.

When I'm thinking about watching a movie on TV - and I have both Amazon Fire TV and Apple TV - I always go to Amazon, which gives me access to a wide variety of services, including Netflix. I rarely think about going to iTunes, and I think that's not a good thing for Apple. They need to be in the equation if they want to keep being relevant.

I'll be interested to see what they do in this segment. I hope it is an Eye-Opener.
KC's View: