Apple-Samsung deal shows shift to services

Bloomberg

Apple and Samsung announced a deal that only recently would have seemed unthinkable: The iPhone maker will begin offering iTunes movies and TV shows on its archrival’s TV sets.
The move demonstrates Apple’s shift towards developing into a tech- and media-services company as sales of gear like the iPhone continue to wane. It’s “further evidence that Apple is willing to change its hardware-first approach and work with third parties to boost services revenue,” said Gene Munster, a longtime Apple watcher.
Last week, after Apple shocked investors by saying iPhone sales missed expectations for the holiday quarter, it pointed to an all-time record services revenue of $10.8 billion for the quarter.
“With services a key part of the Apple flywheel and one of the only silver linings in an otherwise dark period of growth, Cook & Co need to double down on content and distribution partners going forward,” according to Dan Ives, an analyst with Wedbush Securities.
Apple and Samsung were at war for about seven years over smartphone patents, with Apple accusing its rival of copying the iPhone’s design. After multiple trials and Apple being awarded millions of dollars, the two companies eventually settled in June 2018, ending litigation.
Beyond lawsuits, the companies have still long shared both a close partnership, with Apple relying on Samsung for components such as screens in the latest high-end iPhones, as well as fierce rivalry. The two vie in the market for handsets and have battled viciously on and off in courts over alleged patent infringements. In recent years Apple has taken steps to wean itself off Samsung by developing its own future screen technology and devices processors.
The “deal shows that perhaps Apple doesn’t quite view Samsung as the enemy it used to,” wrote Michael Gartenberg, a former Apple marketing executive. “There are others both Apple and Samsung should worry about. Or the enemy of my enemy is my friend.”
The addition of iTunes on Samsung TVs comes just weeks after Apple opened up Apple Music to the Amazon Echo. In 2015, when it launched its streaming music service, it released a version of it for Android. In 2003, Apple opened up iTunes to Windows PCs, which Apple co-founder Steve Jobs likened to “giving a glass of ice water to someone in hell.”