According to 9to5Mac, aside from earning from selling hardware, subscriptions have become an important component of Apple's business.
They, in fact, have grown in size to rival the tech giant's Mac and iPad.
Despite this, the company still desires to expand its service category by focusing on streaming platforms and ads.
Is Apple getting too greedy?
Restructuring Apple's Service Business
Eddy Cue, Apple's senior VP in charge of services, is said to be attempting to restructure the company's profitable "Services" business to focus more on streaming and advertising, Apple Insider has reported.
Several top executives in the segment have already had their roles updated by Cue.
Citing Business Insider, the report noted that as part of the restructuring, Apple's Vice President of Services Peter Stern will no longer handle advertising heading forward and will instead focus on video, iCloud, and other services segments.
On the flip side, advertising vice president Todd Teresi is said to be taking on more responsibility and has been reporting directly to Cue since the start of 2022.
Apple has apparently identified streaming and advertising as two revenue growth prospects, with one individual familiar with the matter claiming that Apple's ad business is now "big enough to live on its own."
Why Did Apple Make This Move?
Apple's services have made remarkable earnings and subscriber numbers, prompting these moves.
As per 9to5Mac, App Store Search Ads, Apple's sole source of advertising, rose 238% to $3.7 billion in 2021 and are expected to reach $5.5 billion by the end of this year.
According to the survey, changes to Apple's privacy standards, such as App Tracking Transparency, have pushed more developers to invest in App Store Search Ads.
Apple To Increase Sports Offerings
Apple Insider mentioned that the iPhone maker is also increasing its sports offering as part of its streaming strategy. The tech giant just added "Friday Night Baseball" to its lineup and is attempting to win "NFL Sunday Ticket" rights.
According to Business Insider, Apple is also pursuing the rights to broadcast NBA games on its Apple TV+ platform.
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Meanwhile, Mac Rumors noted that the sports content would draw in new viewership for Apple TV+, which Apple has been working to build up since its 2019 launch.
Apple still has a limited amount of original content compared to other streaming services, and it is unable to draw the same subscriber numbers as Hulu, Netflix, and Disney+.
Apple TV+, iCloud, Apple Fitness+, Apple News+, Apple Music, the App Store, Apple Care+, Apple Arcade, Apple Pay, and more are now included in the services category, which has grown rapidly over the previous several years.
Apple has made a consistent profit from services throughout the years. The segment raked in $19.8 billion in Q2 2022, up year-over-year from $17 billion.
Separately, it was reported that Apple is also working on new services, such as a possible "buy now, pay later" banking service and an Instacart-style grocery delivery service with a focus on nutrition.
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