Apple AAPL is keeping no stone unturned to expand its Services business. The company’s recent launch of Apple Podcast Subscriptions for listeners in more than 170 countries is a step in that direction.
Apple Podcast Subscriptions service is a marketplace that enables Apple Podcast listeners to buy thousands of subscriptions and channels spanning several formats and genres including news, comedy, sports and true crime.
The service offers subscriptions to shows developed by premier studios like Lemonada Media, Luminary, Realm as well as media and entertainment brands including CNN, NPR, The Washington Post and Sony (NYSE:SONY) Music Entertainment.
Apple’s Podcast Subscription service is expected to boost the iPhone-maker’s competitive position in the podcasting space against the likes of Spotify SPOT as well as Alphabet (NASDAQ:GOOGL)’s GOOGL Google podcasts and YouTube.
Per businessinsider.com, the number of U.S. podcast listeners will increase 16% year over year to 106.7 million. Moreover, 77.9 million people will listen to a podcast on a weekly basis, at least. The growing podcast listener base is likely to attract advertisers. Markedly, U.S. podcast spending is expected to surpass $1 billion this year and reach $1.61 billion by 2024. This presents significant growth opportunity for Apple.
Moreover, Apple’s expanding podcast content portfolio is expected to boost advertising revenues. The subscription service will further boost Services’ top-line growth.
Markedly, fiscal second-quarter Services revenues grew 26.6% from the year-ago quarter to $16.90 billion and accounted for 19% of sales. The segment is riding on App Store, Cloud Services, Music, advertising and AppleCare.
Apple’s endeavors to open up its ecosystem through partnerships with the likes of Samsung (KS:005930) and Amazon AMZN are positives for the Services segment. The subscription-based Apple TV+, Apple News and Apple Arcade services are expected to benefit from the company’s strong installed base. Markedly, Apple currently has more than 660 million paid subscribers across its Services portfolio.
Further, the App Store continues to draw the attention of prominent developers from around the world, helping this Zacks #2 (Buy) company offer appealing new apps that drive App Store traffic. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Markedly, Apple recently announced that its App Store helped developers generate business worth $643 billion in billings and sales in 2020. Moreover, the company stated that the number of small developers has grown by 40% since 2015, and they account for 90% of App Store developers.
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