Apple restructuring services to focus on streaming and ads

Naveen Kumar May 9, 2022

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Apple is not exactly a service company since its main revenue still comes from hardware, but subscriptions have become a vital part of the company. They are now bigger than products like the Mac and iPad. Still, the company seems to want to take its service category even further by pushing streaming platforms and advertisements.

According to a Business Insider report based on sources familiar with the matter, Apple wants to restructure its Services team to make the category even more profitable. Eddy Cue, Apple’s senior vice president of services, has already been putting some changes in place to boost the company’s services.

Peter Stern, VP of services at Apple, was also responsible for “advertising” – as he described it in his LinkedIn profile. However, Cue has demanded that Stern be fully dedicated to services like Apple One, which means Todd Teresi will assume responsibility for Apple’s advertising business.

These changes come as Apple’s services have seen record profits and subscriber numbers. Apple’s sole source of advertising, which is App Store Search Ads, grew 238% to $ 3.7 billion in 2021 and are forecast to reach $ 5.5 billion by the end of this year. The report claims that changes to Apple’s privacy policies, which include App Tracking Transparency, have led more developers to spend on the App Store Search Ads.

Still, there’s more to come. Business Insider corroborates rumors that Apple has been negotiating to bring NFL games to Apple TV +, which would potentially attract even more subscribers to the platform. The company could monetize NFL content by offering it with advertisements or through an additional sports bundle.

Earlier this year, Apple officially teamed up with MLB to bring Friday Night Baseball exclusively to Apple TV +. However, details about when customers will see these changes in practice remain unclear.