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Is Apple Preparing to Launch a Premium News Service?

17 April 2018

Apple (NASDAQ:AAPL) plans to launch a news subscription service, according to Bloomberg sources. Executives have said they're targeting services revenue of roughly $50 billion by 2021. Newsstand was replaced with Apple News in 2015.

Apple's upgraded news service is expected to launch later this year, and will still reportedly share part of the subscription revenue with publishers who are part of the program, though no details of the service cost has been released.

More likely, it's being saved for iOS 13. The company's SVP Eddy Cue spoke about a number of topics at SXSW last month, including the current Apple News app.

There's a bigger question out there: will consumers be willing to pay for premium news and magazine content in the same way they now pay for Netflix video content? Do you like the idea of subscribing to a digital magazine? But previous efforts like Newsstand weren't an all-you-can-eat way of going about it.

After the acquisition of the subscription service last month, a source reported to Bloomberg that Apple made initial cuts of roughly 20 Texture staffers.

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Apple's services business is orders of magnitude smaller than its hardware business, but the company has had success with its Apple Music service, which now boasts almost 40 million subscribers. Customers would subscribe to a premium Apple News offering that would give them access to paid media content from a variety of magazines and news outlets.

Apple shares took a hit in late March, falling as much as 10.4%, along with many other companies listed on the tech-heavy Nasdaq, after Facebook's Cambridge Analytica data scandal and President Donald Trump's crackdown on Chinese investment in United States technology rattled investors. This offers millions of songs for $9.99 per month, and now has more than 40 million subscribers.

If Apple goes through with these plans, it would be treating news similarly to how it treated music around the creation of Apple Music.

It's worth noting Apple is no stranger to buying out services and turning them into subscriptions people actually want to use.

Is Apple Preparing to Launch a Premium News Service?