Apple will have original content in place as viewing habits shift

Apple CEO Tim Cook has predicted that the “breakdown of the cable bundle” will take place at a much faster pace this year and said Apple is well placed to help usher in this change in viewing habits.

Speaking on Apple’s first quarter earnings call, Cook said that Apple will participate in “a variety of ways,” including in original content.

“We’ve hired some great people that I have a super amount of confidence in and they’re working really hard,” he said without elaborating.

Another of four ways that Apple will participate in the video space is by continuing to offer third-party video subscriptions through its App Store – an area where Cook expects to see growth.

“We are participating in this today and I would guess that that’s going to accelerate into the future as the bundle breaks down and people begin to buy, likely multiple, services in place of their current cable bundle.”

The other two video-related areas of significance identified by Cook surrounded Apple’s AirPlay 2 standard and its established Apple TV streaming device.

On the first of these, Cook said he was excited by the string of partnerships announced at CES this month that will see TV manufacturers including Samsung, Sony, LG and Vizio integrate Apple’s Airplay 2 standard into their TVs.

The move will allow users to share videos, photos, music and podcasts from their Apple devices to their TV, while a new iTunes Movies and TV Shows app is also due to debut on Samsung Smart TVs in more than 100 countries.

“We see huge changes in customer behaviour taking place now and we think that it will accelerate as the year goes by to sort of breakdown of the cable bundle that’s been talked about for years,” said Cook. “I think that it’ll likely take place at a much faster pace this year.”

The comments came a day after tech news site The Information reported that Apple’s rumoured standalone video streaming service could launch this spring, and comes just weeks after Cook himself commented that “you will see us announce new services this year.”

Futuresource Consulting said in a research note yesterday that Apple’s iTunes and AirPlay TV deal with Samsung signals “a new era for Apple” and highlights “how important reach is for Apple in the living room moving forwards, as iPhone sales slow.”

In its Q1 results, Apple posted a 5% year-on-year decline in revenue at US$84.3 billion as iPhone revenue dropped 19%. Earnings per diluted share were up 7.5% at US$4.18, while services revenue reached an all-time high of US$10.9 billion, up 19%.

Commenting on the results, eMarketer principal analyst, Yoram Wurmser, said: “The iPhone has been the big driver for Apple’s earning for the past decade, so investors will likely be curious to see how Apple plans to regain its momentum.”