Apple CEO Tim Cook said the company is measuring the success of its new Apple TV+ streaming service in terms of number of subscribers — though he didn’t give a number. He said that was reflected in the “aggressive” pricing of $4.99 a month and the bundle offer, where purchasers of any Apple device get a year free.
“That said, the product itself is about storytelling and we think if we do that well there will be some number of those [shows] that will be critically acclaimed. We are seeing that with The Morning Show and Little America and others,” Cook said, responding to question from an analyst on a conference call who asked how Apple was gauging the success of the service.
He took the opportunity at the top of the call to congratulate The Morning Show stars Jennifer Aniston and Billy Crudup for recent awards.
CFO Luca Maestri noted that Apple TV+, launched in November, did not have a material impact on financial results in the last quarter but that, “We expect that over time it will start contributing to the growth of the services business.”
He said subscribers to all Apple services stood at 480 million in the last quarter and that the company had boosted its estimate of subscriptions for 2020 to 600 million from a previous estimate of 500 million.
He said spending on content for Apple TV+ goes on the balance sheet and is amortized over time depending on “the type of content we product.”
So the takeaway from the hotly anticipated call is basically that Apple TV+ has subscribers and is spending on content.
Cook was more forthcoming on the disturbing situation China, where the Coronavirus has resulted in the quarantine of the city of Wuhan. Apple has considerable exposure in Asia and he said the company is monitoring the situation closely. Apple provided a wider than usual range for its revenue forecast for fiscal 2020 because of the uncertainty.
Several Apple suppliers in Wuhan had to close and businesses around the country have been working shorter hours. He said Apple had to close one of its retail stores and is cleaning the others locations frequently and physically taking the temperatures of employees regularly.
“Retail traffic has been impacted across the country,” he said.