If Apple launches its own TV service, as reports fromThe Wall Street JournalandThe New York Timesare suggesting, it would attract billions of users in its first year, and quickly become Apple’s next billion-dollar business.
Business Insider Intelligence analysed numbers, including Apple TV shipment projections, active-device estimates, and growth rates of competing services after they have launched to paint a picture of how large an Apple TV service could really be.
Within its first quarter of operation, Apple’s TV service could reach 4.1 million subscribers within the US, according to Business Insider Intelligence’s estimates. That number is expected to jump up to 7.4 million by the end of 2016 and 10.7 million by the end of 2018.
With that number of subscribers, Apple could make $US427 million in revenue after the service’s first quarter of operation, assuming it’s priced at $US35 per month. Reports suggest the streaming TV service could cost anywhere between $US30 and $US40 per month.
By the end of 2016, Apple could make $US2.4 billion from its TV service and $US4.2 billion by 2018. To put that in perspective, Netflix made $US5.5 billion in revenue in 2014.
Apple is likely to make a chunk of money on the hardware side, too, since its TV service could create more demand for Apple TVs. Business Insider Intelligence estimates that there will be 19.7 million active Apple TVs in the United States by the end of this year. Most people are likely to watch Apple’s TV service through its set-top boxes rather than iPhones and iPads, according to Business Insider Intelligence’s findings.
The numbers just reiterate what a giant opportunity the TV industry can be for Apple. The reports come at a time when several companies are trying to appeal to cord cutters — people that don’t subscribe to a traditional cable package and rely on services like Netflix, Hulu, and HBO Go among others for their TV needs.
The real kicker, however, is that Apple’s service is expected to come with ESPN as well — which could be a game changer for cord-cutting services.
Perks like that could give Apple TV an edge against competitors such as Sony, which just launched its PlayStation TV streaming service on Wednesday.
Apple’s offering is expected to launch in the fall.
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