The Industry

Apple Wants You to Pay It Every Month

Even if you stop buying an iPhone every two years.

Apple CEO Tim Cook speaks on-stage during a product launch event at Apple's headquarters in Cupertino, California, on September 10, 2019.
Apple CEO Tim Cook speaks in Cupertino, California on Tuesday. Josh Edelson/AFP/Getty Images

On Tuesday, Apple held its annual press event unveiling new hardware, notably the Apple Watch Series 5 and the iPhone 11. Yet the biggest news coming out of the somewhat underwhelming event had nothing to do with things that you can hold. While Apple’s new devices are only slightly more advanced than previous generations—the new iPhone has a hardier processor and a better camera, while the watch will now show you the time even if you don’t flick it—Apple’s plans to move into the gaming and TV programming business underlined the company’s new emphasis on services. With iPhone sales beginning to stumble, Apple wants to collect your money every month, not just every new-phone cycle.

The event didn’t even begin with hardware but with the company revealing more details about Apple Arcade, a gaming service that’s set to be released in more than 150 countries on Sept. 19. A subscription will give customers access to more than 100 games. With a monthly fee of $4.99, it’s a cheaper option than the $19.99-per-month PlayStation Now and the $9.99-per-month Google Stadia gaming services. (It’s unclear, though, whether your average Apple game is going to be as advanced or expansive as a PlayStation game.) During the event, Apple also previewed three upcoming games: Frogger in Toy Town by Konami, Shinsekai: Into The Depths by Capcom, and Sayonara Wild Hearts by Annapurna Interactive.

The second product that Apple highlighted during the event was Apple TV Plus, a much-hyped streaming service featuring original programming. Apple CEO Tim Cook mentioned several shows that will be leading Apple’s lineup: a millennial-friendly take on Emily Dickinson called Dickinson, a showbiz intrigue drama called The Morning Show, and a space exploration miniseries called For All Mankind. Cook also premiered the first full trailer for the post-apocalyptic saga See, which showcased lush forest locales, epic battle sequences, and a gallant Jason Momoa. It could very well be Apple’s answer to Game of Thrones.

At $4.99 per month and a free year included with the purchase of any new Apple device, Apple TV Plus is undercutting many of its major competitors. Netflix’s most popular plan is $12.99 per month, while Hulu Basic is $5.99 per month and the upcoming Disney+ is $6.99 per month. HBO Go is $14.99 per month.

For the past decade or so, Apple has focused much of its energy on selling iPhones, its most popular hardware product. However, iPhone sales have been leveling off as consumers find that they don’t need to buy a new smartphone every year or two, especially with prices topping $1,000 —the top-of-the-line iPhone 11 Pro will be $1,099. Some analysts predict that iPhone revenues will decline about 15 percent in 2019. And though MacBooks, iPads, and Apple Watches are popular in their own right, it’s clear that they aren’t selling at volumes that will prop up the company like the iPhone once did. Indeed, the iPhone helped Apple attain a market cap hovering around $1 trillion, which the company is now using to plow into entertainment and other services.

There are some rumors that Apple is planning a major redesign for the iPhone in 2020, with eye-popping features like 5G capability partly to reinvigorate enthusiasm for the product, but the company seems to be hedging its bets by moving into the services sector. Along with Apple TV Plus and Apple Arcade, the company also recently debuted the Apple Card credit card and the Apple News Plus all-in-one subscription service. If you’re not willing to shell out $1,000 for an iPhone, Apple is hoping you’ll at least spare $5 a month to play Frogger.