Apple launches price war on Netflix as it unveils TV Plus

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Apple has declared a price war on Netflix and Disney by launching a £4.99 per month video streaming service designed to reduce its reliance on sales of devices.

The cut-price service was announced at the Steve Jobs Theatre in Cupertino alongside a slew of new iPhone 11 models, touting upgraded, ultra-wide lens cameras and a cut to its entry price to £729.

However, the iPhone announcements were overshadowed by the unveiling of Apple’s new video service, which marks a move towards services over hardware as the iPhone maker seeks to reposition itself amid falling sales of its 12-year-old flagship product.

 

The new Apple TV+ subscription, which will launch on November 1 in 100 countries including the UK, represents a major strategic shift for the US technology giant. Apple has struggled to come up with hit new devices in recent years and has been buffeted by growing trade tensions between the US and China, where most of its devices are made.

The subscription can be split between up six family members, and will be significantly cheaper than the cost of Netflix’s cheapest plan, which is £5.99 in the UK and $8.99 in the US.

Shares in Netflix fell 3.3pc, while Disney, which controls Hulu and is set to debut its Disney Plus streaming service later this year, dropped 2.3pc.

Apple chief executive Tim Cook hailed the response to its trailers for its new TV shows. “The reaction to these trailers has been incredible,” he said.

In an effort to lure in consumers, Apple will also offer a year free of its new TV service for those who buy a new iPhone.

“For once the iPhone wasn’t the star of the show,” said Ben Wood, an analyst at CCS Insight. “Aggressive pricing of £4.99 for TV+ and Arcade and a bundled TV+ subscriptions with new product purchases underline Apple’s service ambition as it drives towards service revenue of around $50 billion in 2020.”

The annual event saw Apple reveal three new iPhones: the iPhone 11, which will start at £729 and an iPhone 11 Pro and iPhone 11 Pro Max, which will cost £1,049 and £1,149 respectively.

The California giant’s annual iPhone launch has become a focal point of the industry’s calendar, with nearly all new smartphones being compared to Apple’s latest device.

 

It was the third year in a row that Apple has launched three new iPhones at its September event as the firm moves to appeal to different price points. Its main device, the iPhone 11, came in at a cheaper price point than its previous model the iPhone XS.

Despite adding its “Pro” branding to the iPhone for the first time, previously reserved for its MacBook laptops and iPad tablets, some of the upgrades on the new phones were modest. Its overall design remained the same as its previous iPhone XS last year and the iPhone Xin 2017.

However, the Pro model sported an improved triple camera, capable of taking near-professional quality photos and videos, according to executives.

Cook said the iPhone had “changed industries and led to the creation of entirely new ones” and the company was “striving to make it better and better”.

But sales of the iPhone now made up less than 50pc of Apple’s overall revenue this summer for the first time since 2012.

Global smartphone sales have stalled as the market matures, leading Apple to focus its spending on other areas. Service revenues, which will include its TV app, new gaming app and Apple Music, were up 13pc in June, hitting $10bn in that quarter.

 

Source: The Telegraph

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