IHS: Apple TV+ Growth Hindered by iOS Mandate

When Apple bows its branded $4.99 monthly Apple TV+ subscription streaming video service on Nov. 1, it will be the cheapest SVOD platform on the market.

But being priced 50% below Netflix apparently isn’t good enough for IHS Markit, which suggests the service’s growth will be hampered by its exclusivity to Apple’s iOS platform.

Apple TV+ will be limited to the new iPhone, Mac, iPad and Apple TV streaming media device. The company is offering a free year of Apple TV+ with the purchase of any of the aforementioned devices.

Indeed, Apple is projected to sell about 70 million new iPhones through the winter holidays, in addition to Macs, iPads and Apple TVs.

Yet the data underscores the reality that Apple TV+ will have the potential to reach just 57% of the addressable market ion the United States, according to IHS Markit.

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By comparison, Netflix reaches 95% of the U.S. market — a percentage the pending Disney+ platform is expected to emulate.

“With its limited device distribution, Apple TV+ will be accessible to just over half the online population in the US, thus hindering subscriber growth,” analyst Fateha Begum said in a note. “Although Apple is the largest smartphone brand in the U.S. market and plans to offer free access with hardware purchases, the company would need to widen its device distribution to compete with OTT players that are now available nearly universally.”

Begum argues Apple should move beyond its iOS borders and make Apple TV+ available to Android devices. Indeed, the SVOD service is expected to be made available on Roku and Fire TV, in addition to Sony, LG and Vizio smart TVs.

“By opening up to other platforms, Apple TV+ will see its addressable base increase by 24% to 87 million U.S. households,” Begum said. “This will improve Apple’s position, but the company will still be at a disadvantage compared to competitors who can address the entire U.S. market of 124 million online households.”


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