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Apple senior vice president of services Eddy Cue penned a 3,000-word love letter to Apple’s progress in services today, reflecting on the company’s progress in 2022. The big numbers include a massive 900 million paid subscriptions, $320 billion paid to app developers since the App Store’s inception in 2008, and Shazam, Apple’s app that listens to a song and tells you what its name is, “shazamming” songs over 70 billion times.
“Never before have we enjoyed instant access to more cinematic original series, more engaging films, more global music, more creative apps, more essential journalism, and more immersive games and sports — no matter where you are, across all your favorite devices,” Cue says.
It’s worth understand which apps and services Apple sees as critical. There are now at least 13 important enough for Cue to mention them:
- App Store, the uber-app, if you will
- Apple Arcade
- Apple Music
- Shazam
- Apple TV+
- Apple News and Apple News+, along with My Sports
- Apple Fitness+
- Apple Podcasts
- Apple Books
- Apple Maps
- Apple Pay, along with Apple Card
- Wallet, including Apple Cash
- iCloud and iCloud+
The most important reveal in Cue’s Apple-services-in-review is the massive number of paid subscriptions that Apple facilitates. Many them will be Apple-owned services, but many will be third-party apps and services available via Apple devices and platforms. While many of those third-parties are working to transfer their customers’ subscriptions off Apple platforms — which carry a 30% first-year commission and an ongoing 15% subsequent-years fee — to their own, Apple’s continued financial success relies on growing both its own subscription revenue and continuing to be the place where its customers subscribe to other services.
Apple’s most important subscription is Apple One, a combo of six different services: Apple Music, Apple TV+, Apple Arcade, Apple Fitness+, Apple News+, and iCloud+.
Cue didn’t provide details about the number of subscriptions Apple has for Apple One, but did say that subscribers get access to 100 million songs, and that Apple TV+ now has 1,305 nominations for awards and 300 wins, including becoming the first streaming service to win an Academy Award for Best Picture with CODA. Cue also said that there are now 3,500 workouts and mediations on Apple Fitness+, and there have been 250 million in-game achievements in Apple Arcade games.
Sports is an area that Apple clearly sees as a growth opportunity. The company partners with both MLB and Major League Soccer for sports streaming, and was rumored to be in the running for an NFL broadcast recently.
There’s not a lot of hype in Cue’s post about Apple Podcasts, which seems to have been losing ground to its chief rival Spotify over the past few years.
It’s interesting that Apple sees Maps as a major service to be listed along with the other apps and services, and that likely speaks to Apple’s future ability to monetize maps with business listings — and perhaps ads — in the future. Ticketing and ordering rides from partners such as Lyft and Uber are also additional revenue opportunities in Apple Maps.
“With iOS 16, Maps introduced multistop routing, as well as enhanced public transit updates, making it easy for riders to see how much their trip will cost, add transit cards to Wallet, see low balances, and replenish transit cards, all without leaving Maps,” Cue said.
Apple Pay is definitely a critical app for Apple, and Cue says that Apple Pay facilitated a record number of purchases globally in the 2022 holiday season. Apple Card, the credit card available from Apple and Goldman Sachs, is U.S.-only right now, so that’s another growth opportunity for the company in the future if it chooses to expand globally.
But the most important app might still be the original app: the App Store itself.
Which, according to Apple, gets a huge amount of use:
“Powering a robust global economy, the App Store connects developers of all sizes, from emerging solo creators to large international teams, with more than 650 million visitors across 175 regions each week,” Cue says. “Developers selling digital goods and services on the App Store have earned more than $320 billion since the platform’s 2008 launch, marking another year of record earnings.”
The big question here is whether Apple’s monopoly on app stores on its own platform will crumble under Europe’s new Digital Markets Act. If so, some of its subscription revenue and some of its hold on the mobile app ecosystem on iOS will likely suffer.
