Apple seeks to tide over iPhone rout through media tie-up with Samsung

It is true that in a rapidly evolving business world there are no permanent friends and enemies. After fighting a pitched battle over alleged infringement of smartphone patents, Apple and Samsung have not only reached a settlement but also forged an important business partnership.

The tech giants surprised Wall Street this week when they announced a mutual agreement, under which Apple will offer iTunes content on the television sets sold by Samsung. The initiative complements the recent uptick in Apple’s service revenue, which hit a record high in the most recent quarter when iPhone sales missed the estimates, triggering a stock selloff.

Interestingly, the deal comes after Apple ended one of the most challenging years ever, when market value suffered miserably due to the faltering demand for its flagship product iPhone. In the current scenario, it is quite natural that Apple wants to focus more on its media segment and become a provider of both technology and media services.

The deal comes after Apple ended one of the most challenging years ever, when its market value suffered miserably

The strategy is to ride on the dominance of Samsung in the smart TV market and reach as many viewers as possible, which is crucial for the company when it comes to competing with market leaders like Netflix (NFLX), YouTube and Spotify (SPOT). The strong viewership created through such the collaboration would make an ideal base for the forthcoming launch of Apple’s original content service.

The patent lawsuits, in which Apple alleged Samsung of using its smartphone technology violating copyright, were settled in mid-2018 when the jury issued orders in favor of Apple.

The content deal would give Samsung TV customers the convenience of accessing iTunes without having to purchase Apple’s set-top-boxes. It will also allow viewers to stream content from their iPhone to the television sets. Meanwhile, the news about the partnership will put an end to rumors that Apple is planning to enter the business of television production.

Will this new year be a good one for Apple?

All along, it has been a love-hate relationship between the world’s largest smartphone makers, with a set of lawsuits in the background. Even while waging the legal battle, Apple procured iPhone components from Samsung. Also, the companies are partners in a joint initiative involving technology firms and automotive companies for developing digital car keys.

Apple shares badly need a major boost to stop the free fall that started in the second half of last year. The stock ended the last week slightly down but traded higher in the early hours of Monday.

 

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