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Apple’s Perfectly Timed Entry into This $124.6 Billion Market

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Apr. 12 2019, Published 7:24 a.m. ET

Apple’s subscription video service coming in the fall

Apple (AAPL) last month announced a subscription video service called Apple TV Plus that it plans to launch this fall. The Apple TV Plus service will serve original shows and movies created by Apple and its partners. The pricing of Apple’s premium subscription video service is still under wraps. But with this service, Apple has its sights set on the rapidly expanding video streaming market. According to Grand View Research, the global video streaming market will be worth $124.6 billion by 2025. The market was estimated at $36.6 billion in 2018.

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Paved path, customer base, and 5G

Apple’s entry into the video streaming market looks perfectly timed in many ways. First, Apple is entering a market where Netflix (NFLX), Amazon (AMZN) and other providers have already spent years on the heavy lifting of popularizing streaming, so Apple will be traveling a mostly paved path. Apple’s subscription video service is set to arrive at a time when the company has greatly developed its device installed base, providing it with a large pool of potential customers. Apple disclosed in January that 1.4 billion of its devices are in active use around the world. Then there is 5G. Verizon (VZ) and AT&T (T) are busy building 5G networks across the United States so they can provide customers with faster wireless connections. Because of 5G’s ultrafast data speeds, it is expected to fuel consumption of digital video services, particularly on mobile devices, which should be a boon for Apple’s coming subscription video service.

A crowded scene

However, Apple is entering a rapidly crowding market that could call for extra marketing efforts.

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