Apple is about so much more than just iPhones now


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Apple will create the same old buzz on Wednesday when it holds a splashy media occasion, presumably to replace its iPhone lineup.

However the way forward for the trillion-dollar firm is about a lot greater than its most well-known machine.

Apple can be investing closely in its media enterprise, rising providers like iTunes and iCloud and constructing a manufacturing studio from scratch.

These corners of Apple’s enterprise — consider it as all the pieces however the — are extra essential than ever. The iPhone remains to be the most important income driver for Apple, however gross sales development has begun to sluggish.

In Apple’s providers division, which incorporates Apple Music subscriptions, iTunes media and iCloud storage, income was up 27% for the primary 9 months of the enterprise yr, at $27.2 billion. That is far forward of 15% development for the iPhone.

Apple’s plans for its enterprise outdoors the iPhone go far past distribution.

Apple Music not too long ago introduced a world music publishing division, meant to forge nearer ties with music publishers that symbolize songwriters. The corporate can be shopping for Shazam, the music recognition service.

And even greater plans are on the horizon. Apple has been inking offers proper and left for brand new unique content material, very like what Amazon (AMZN) and Netflix (NFLX) are doing in leisure.

“Authentic content material goes to be a giant deal for Apple,” mentioned Gene Munster, a tech analyst and managing companion of Loup Ventures. “It might be as massive of a enterprise as Netflix, or greater.”

Munster mentioned Apple will spend about $900 million this yr on unique content material. It has already locked down a powerful roster, that includes work from Oprah Winfrey, Reese Witherspoon and Stephen Spielberg. Reveals might debut as early as subsequent yr.

Munster in contrast Apple right now to what Netflix was doing 5 years in the past, when it launched its first unique sequence, “Home of Playing cards.”

Netflix expects as a lot as $15 billion in income this yr. Munster thinks Apple’s unique content material division shall be posting comparable numbers by 2023.

Different analysts have predicted eye-popping figures, too. Analysts at Morgan Stanley not too long ago recommended that income for each Apple Music and a brand new Apple Video product mixed might attain between $22 billion and $37 billion by 2025.

One catch: Nobody is aware of what that service will appear like. Apple has not mentioned the way it plans to distribute unique exhibits.

The Morgan Stanley analysts mentioned that Apple might cost $eight to $13 for the service, relying on what it gives and whether or not it’s bundled with one other service, like Apple Music. That sort of pricing would put it in keeping with comparable choices and bundles from different streaming providers.

Munster, in the meantime, identified that Apple has one big benefit over a typical firm that’s making an attempt to construct a consumer base: pre-existing clients.

The corporate reported earlier this yr that no less than 1.three billion of its iPhones and different gadgets are getting used world wide.

So no matter Apple needs to advertise, it should have a solution to attain an unlimited viewers immediately — one other signal that the iPhone remains to be awfully essential to Apple, too.

CNNMoney (New York) First printed September 11, 2018: 2:29 PM ET

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