Don’t expect to see any ads on Apple TV+.
“We feel strongly that what that customer wants is an ad-free product,” Tim Cook, Apple’s chief executive officer, said on an earnings call today (28 January) when asked if the company’s streaming service will make room for ads.
Apple has a wide range of consumer data it gleans from product sales, subscription services and credit card business that it could use to target TV+ viewers with ads. While Cook doesn’t have an “aversion” to ads that “don’t encroach on people’s privacy,” he made it clear that Apple is currently focused on keeping TV+ ad free.
Apple posted staggering quarterly results. Revenue hit a record high of $91.8bn, up 9% from the previous year’s mark.
Revenue for Apple’s services business, which includes Apple TV+, grew 17% year-over-year to $12.7bn.
While Cook said TV+ is off to a “rousing” start, Apple’s chief financial officer Luca Maestri said the service didn’t have a “material impact” on services growth since it was launched near the end of the quarter, in November, and is offered for free to purchasers of new Apple products.
Maestri did say that search ad revenue within the Apple app store reached an all-time high.
Apple is making a concerted push into both television and gaming. It launched a streaming service late last year that’s already estimated to have over 33.6 million users.
In total, Apple set revenue records in the US, Canada, Mexico, Brazil, UK, Germany, France, Italy, Spain, Poland, Thailand, Malaysia and Vietnam.
Apple’s iPhone sales grew 8% to $55.96bn year-over-year, and wearable sales jumped from $7bn to $10bn during the same time period.
Apple set revenue guidance for the second quarter between $63bn to $67bn, a wider range than usual due to the Coronavirus outbreak in China possibly disrupting sales and supply chain operations.
Looking ahead, Cook said he’s excited by the possibilities of augmented reality.
“You rarely have a new technology where businesses and consumers both see it as key to them,” said Cook. “It [will] go across both business and your home life.”