Tuesday April 27 2016 could prove to be a pivotal day in Apple’s recent history.
After reporting a fall in quarterly sales of around £5.5bn compared with the same time last year and seeing their share price drop by 13% – the first fall in 13 years – mainly due to declining iPhone sales, many people have been left wondering what’s next for the Cupertino firm.
The outlook is still far from gloomy for Apple, as the much anticipated 2016 release of the iPhone 7 should see sales pick up again. However, does this quarterly financial report suggest that consumers are starting to become disillusioned with Apple’s flagship product? And could now be the time for the firm to set its sights wider and begin investing in a new cornerstone product to ensure it keeps moving forward?
With the spiraling costs of TV packages from the likes of Sky and BT, could Apple take on the powerhouses of British broadcasting to finally push their Apple TV streaming service as a real alternative to customers who feel as though they are not getting value for money from some of the more established outlets?
What could Apple do to push the Apple TV in the UK?
Even with the release of the fourth generation Apple TV, the product is finding it hard to crack the market and is yet to take off properly in the UK.
Unless you’re an Apple diehard, there is nothing on offer to really entice you to the product and persuade you to pull the plug on your Sky TV subscription. In order to solve this problem, Apple could bid for broadcasting rights to the Barclays Premier League, stream the events live, and use this as a key selling point for the Apple TV.
This idea has been touted before, but Apple’s poor financial showing in the second quarter of the 2016 fiscal year may persuade the company to revive its interest sooner than expected.
This will show that Apple means business and is ready to establish itself as a force in the crowded home entertainment sector.
Could Apple afford to bid for Barclays Premier League rights?
Despite reporting a drop in sales, Apple is far from teetering on the brink of poverty. The company now has a cash pile of over $230bn which, according to The Guardian, is more than the yearly gross domestic product (GDP) of Peru, New Zealand and the Czech Republic.
In 2015, Sky Sports and BT Sport won the broadcasting rights to the Barclays Premier League in a deal worth over £5bn. The rights will be made available for tender again at the end of the 2018-19 season, and Apple possesses the financial muscle to blow bids from competitors out of the water.
With broadcasters such as Al Jazeera and Discovery rumored to be involved in the bidding last time out, it goes to show that live sport, especially major competitions like the Barclays Premier League, offers a major boost to a media portfolio and is a great way of attracting new customers.
With the Barclays Premier League being the most watched league in the UK, and commanding a huge global appeal, can Apple really afford not to at least attempt going in for the rights?
If successful, how could Apple broadcast their Premier League coverage?
Taking the Barclays Premier League rights from Sky Sports, who have dominated the UK market for over 25 years, would be a major victory for Apple and could be a major turning point in British broadcasting.
A subscription infrastructure is already in place with iTunes, which makes the process much easier.
In much the same way that television programs are offered on the platform, customers could be presented with the live fixtures available to them on the iTunes Store, purchase them for a fee and then use AirPlay to stream this content to the Apple TV.
Alternatively, Apple could offer a Barclays Premier League app in the App Store and charge customers a fee of, for example, £15 a month to view the coverage. This is much cheaper than the packages offered by Sky Sports, and by pooling billions of pounds into the recent Premier League deal, the costs for their service will rise as the company aim to get a return on their investment.
So, offering one of the most popular sporting competitions at a lower price than the major player in sports broadcasting would be seen as an attractive proposition for customers and would give the Apple TV a much needed shot in the arm in the UK.
Will Apple make it happen?
Apple was rumored to be in the bidding process last time around, but if the Cupertino company is serious about pushing the Apple TV as a major product in the UK, the ability to offer compelling, live content is essential.
Apple will have to wait another three years for the opportunity, but what better way to get a foothold in the market than by offering affordable access to a league that regularly pulls in over 1 million UK viewers for every televised game. That’s a lot of subscribers to target.
As the competition becomes more intense, the cost for Premier League rights is likely to rise each time, and whether Apple is willing to shell out billions of pounds just to try and crack the UK market remains to be seen. However, with iPhone sales stagnating, Apple should take this as a sign that its winning formula is beginning to lose momentum and that investment is needed in its other product lines to ensure that the company stays at the forefront of its industry.
Written by Daniel McSkimming