US technology behemoth Apple has signed a new agreement with Samsung in relation to its streaming and content services in an effort to offset a decline in iPhone sales. The deal brokered between Apple and the South Korean conglomerate will enable the use of iTunes streaming services on Samsung smart TVs.
In a profit warning last week, Apple CEO Tim Cook, was quick to point to an increase in the growth of its services segment as one of the many positives from its fiscal Q1 in 2019, covering the period to 29 December 2018).
In addition to this, Cook highlighted that the services segment had secured record quarterly revenues across all of its markets, but did concede that a sharp decline in iPhone sales was a concern. Earlier this year, Apple was overtaken by Huawei in relation to the number of smartphones sold globally, whilst Samsung remained the incumbent.
As aforementioned above, the deal with Samsung will allow users of Samsung smart TVs to stream films and TV content from iTunes directly to selected TV sets from early 2019. It will also support Apple’s AirPlay2 audio, video and games streaming services.
The move essentially means content from Apple TV can be accessed on a Samsung product without the need for Apple’s own hardware. The two vendors have a history of intense rivalry, often ending in litigation.
Moor Insights and Strategy president Patrick Moorhead said in a series of tweets the latest deal was “more affirmation Apple is intent on driving its services cross-platform” and raises the question of whether “Apple is actually abandoning its end-to-end positioning for the sake of revenue growth.”
Analyst Paolo Pescatore noted: “Samsung is better placed than rivals to act as an aggregator given its broad distribution reach. For this reason, it will provide a much needed services revenue boost for Apple.”
