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iTunes coming to Samsung TVs/ Samsung issues profit warning

09 January 2019

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by Anchor

Samsung and Apple announced this week that Samsung will add an app to its smart television sets allowing viewers to watch content bought on Apple’s iTunes. Bloomberg writes that this is “a possible first sign” Apple is looking to “distribute its forthcoming television service on devices made by others.” Longtime Apple analyst, Gene Munster described the move as “further evidence that Apple is willing to change its hardware-first approach and work with third parties to boost services revenue”. In December, Apple opened up Apple Music to the Amazon Echo as it looks to compete favourably in the marketplace with Spotify and, according to Bloomberg, placing the service on the world’s most popular smartphone operating system and voice control service will help that in addition to generating an extra $10/month per customer. The move also exposes non-Apple hardware users to Apple products, potentially pushing them to the company’s devices when they upgrade.

Samsung TVs held 33% of the smart TV market in 2018 – above that of Vivo, LG and Sony. Munster also believes that the deal signals that Apple has no imminent plans to enter the physical TV space. Opening up iTunes to Samsung TVs also means Samsung television users no longer need to purchase an Apple TV set-top-box in order to access Apple content. Samsung is opening up its 2019 TV lineup to other voice assistants, announcing that users will be able to control its upcoming QLED sets with either Amazon Alexa or Google Assistant, albeit fairly rudimentary controls. The user will also have to provide the assistant device (Echo, Google Home, or other smart speaker). Samsung’s TVs will understand and execute commands they receive from Alexa or Assistant, but the only built-in voice helper will continue to be Bixby.

Meanwhile, Samsung also said this week that it estimates its quarterly profit dropped by 29% YoY in 4Q18 to about KRW10.8trn (c. $9.6bn), while sales of c. KRW59trn (c. $52.5bn) would be down 11% YoY. The announcement comes just 3 months after Samsung recorded its highest ever profit (in 3Q18). Samsung expects profit to remain subdued in 1Q19, but said that “the market is likely to improve as new smartphones are released during the second half of 2019.”

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