What you need to know
- Apple is pushing its services growth more and more.
- Apple News +, Apple Arcade, and Apple TV+ have all launched in 2019.
- But none of them are available in China, an important country for Apple.
Apple has spent much of 2019 pushing its services business and has launched three new ways for customers to give it monthly income. Apple News+, Apple TV+, and Apple Arcade are all subscriptions that people can pay for and it all adds to Apple's services bottom line. Except in one of its most important markets – China.
As a Bloomberg report notes, nobody in China is able to enjoy any of those new services. They can't watch movies from iTunes, either. Or listen to music. And that's bad for Apple's services business.
With Apple leaning on services more and more both it and its investors are left with a conundrum. What do they do about China?
This is a concern for investors because Apple is relying on services to power future revenue and profit. If the company can't sell these offerings in the world's large internet market, it will be harder to keep growing. About 10% of Apple's services revenue comes from China, while the country accounts for roughly 18% of iPhone sales, according to Dan Ives, an analyst at Wedbush Securities. "The missing puzzle piece for services is China," he added. An Apple spokesman declined to comment.
If Apple can find a way to work around China's issues, or work with the country in order to appease it, the potential for income is huge. But as with all things in China, that isn't going to be an easy feat at all.
