SINGAPORE: The bundling of Apple’s new TV streaming service with any device purchase may sway some consumers choosing between the latest iPhones and other top-end smartphones, but the overall impact on iPhone 11 sales in Singapore will be limited, according to industry analysts.
Apple launched its latest smartphones and services on Wednesday (Sep 11), including the much speculated Apple TV+ offering. The TV streaming service will be available in Singapore, among more than 100 countries, from Nov 1 and will cost S$6.98 per month. Additionally, those who buy an iPhone, iPad or Mac will get a free one-year subscription to the service.
Commenting on this move, Ecosystm principal analyst Tim Sheedy told CNA in an email that it is “hard to believe” that customers who would be willing to spend between S$500 and S$2,500 on an Apple device would think twice about spending S$6.98 a month for Apple TV+.
While it is a “great bonus” and existing Apple customers who upgrade their devices will be happy to have the streaming service for free for a year, Mr Sheedy believed the offer will have a “limited impact” in influencing people’s decisions about upgrading their handset. It may sway some who are deciding between the higher end iPhone 11s and other premium devices like the Samsung Galaxy Note 10 to go with Cupertino’s offering, he added.
“By making the service this affordable, Apple has limited the appeal for those that are getting it for free,” the analyst said. “The real benefit of giving Apple TV+ for free to customers who purchase an Apple device is that it means someone who might not have used Apple TV+ is likely to try it - and might become a paying subscriber in the future.”
This might give the US consumer tech giant a boon of hundreds of millions of viewers on its TV streaming platform in a short period of time, Mr Sheedy said.
In fact, the lost cost of the TV streaming service may see telcos here give it away free with post-paid mobile or broadband plans, as they have done previously with music streaming services like Spotify and Apple Music - thus further limiting the appeal of the one-year free subscription, he added.
Another analyst, IDC’s Bryan Ma, agreed.
The vice president of Devices Research at the IT research company said the “ecosystem pull effect” of Apple TV+ will likely be limited at first because it depends on the “social stickiness” of the content and whether it can unearth another Game of Thrones-like title that appealed to many.
He added that since the monthly subscription price isn’t too high, and the service will be available to other smart TVs and not just on Apple devices, these will have an effect on appeal.
READ: Apple TV+ to launch in Singapore at S$6.98 a month
IPHONES STILL A DRAW, JUST NOT LIKE BEFORE
That said, Mr Ma reckoned the iPhone 11 devices will still resonate with Apple fans and those who are “status and fashion-conscious” even if the new features aren’t anything dramatically different from devices already on the market.
For instance, while the iPhone 11 Pro and Pro Max’s rear triple-camera brings similar functionalities to devices like the Google Pixel and Huawei’s P- and Mate series, the analysts said the arrangement would help signal to others that the person is carrying Apple’s latest flagship offering.
Apple’s strong consumer appeal can be seen with its No 1 smartphone vendor spot in Singapore, garnering 37 per cent of market share from Q3 2018 to Q2 2019 while Samsung came in second with 33 per cent, the IDC analyst said.
Canalys research analyst Jin Shentao backed this observation up, saying Apple had the highest market share here for 2017 (36 per cent) and 2018 (32 per cent).
While Singaporeans are not upgrading to the latest versions of iPhones as quickly as before, the new smartphones tend to receive better reception here than other major markets like the United States and Western Europe, he said.
Additionally, a huge portion of iPhones sold here are via telcos due to attractive subsidies and Mr Jin said Apple's flagship smartphone is expected to continue dominating the local market.
5G WILL BE KEY
For Forrester Research’s Frank Gillet, the higher-end iPhone 11 models showcased Apple’s engineering advantages to drive “new levels” of computational photography features such as slo-mo selfies, or “slofies” as described during the launch, and dual video recording through two lenses at a go.
His colleague Thomas Husson added the latest smartphones are a “powerful upgrade” to the X edition, and leapfrogged its competition in terms of performance and the photo and video experience.
“Apple is right to differentiate the experience by bundling new unique content subscription services on top of its products instead of focusing on latest technologies such as 5G that are not yet delivering meaningful consumer benefits,” Mr Husson said.
The next-generation mobile network was also highlighted by Ecosystm’s Sheedy, who said the lack of 5G coverage here means consumers will not need to consider that factor when deliberating on their next smartphone purchase. In markets like Australia, around half of the pre-orders for Samsung’s new Note 10 were the 5G variant, he added.
“But as 5G networks come online in Singapore next year, Apple can expect to lose market share as those bleeding-edge customers upgrade to 5G handsets from other manufacturers,” he warned.
The most likely consumer demographic that would get the latest iPhones will be from the professionals, managers, executives and technicians (PMETs) market, as they are the ones with the disposable income to afford these premium products or receive an allowance from their companies to pay for these, Mr Sheedy said
Younger Singaporeans, many of whom are invested in the Android ecosystem, are unlikely to rush for the latest iPhones though, he added.
“The reality is that the iPhone 11 is perhaps the least exciting iPhone release from Apple,” said Mr Sheedy. “But this can also be said for many upgrades from many handset manufacturers.”
“5G will provide an incentive for many to upgrade when it rolls out in Singapore - but until then we should not expect massive swings in market share between iOS and Android,” the analyst added.