In one year, Apple saw its value increase by 17%. In order not to stop on a good path, the brand looked more closely at the world of sport.
SPORTS BUSINESS OBSERVATORY –Holder of a Master’s degree from the Sorbonne, specializing in issues related to Latin America, Mathieu Sauvajot first wrote articles dealing with the geopolitics and economy of this continent, before turning to the field of sport. He is now an editor at the Observatoire du Sport Business.
There are companies that seem to be unaware of the crisis. In just one year, Apple has seen its value increase by 17%, enough to further establish its status as the world’s most bankable brand according to Forbes, and it’s not about to stop there. . From now on, the apple brand is trying to establish itself in the sports sector.
If Apple has succeeded in becoming the leader of the GAFAM economy, it is mainly thanks to a well-practiced strategy, based on the regular renewal of its product range as well as a system of diverse subscriptions as they develop. Every year, new versions of its flagship products are released, offering improved performance as well as new features, to convince the most loyal customers to renew their devices, and new ones to give up. But the non-negligible cost of these products and their relatively long life (as many as five to seven years for an iPhone) combined with the decreasing marginal utility of innovations is such that sales tend to stopping. Suffice it to say that Apple has every interest in diversifying revenue sources to maintain its leadership, and this is where subscriptions come in.
In its latest report, Apple counted a total of 860 million paid subscriptions taken for its various platforms, and it must be admitted that there is something for everyone. From the most general such as Apple TV+ (streaming) or Apple Music, to the most specific such as Fitness+ and AppleCare, the Tech giant offers at least one service capable of convincing any user.
True, the income generated by these services is lower than that linked to sales, counting only about ten euros for most subscriptions, while on the contrary, you have to pay more than a thousand euros to get the latest phone, but the interests are many. The income is regular, it is easier to estimate its quarterly or even annual turnover, but above all, there is a real opportunity to maintain a larger and more diverse clientele, if in the long term considered by a this which can no longer be done without the services offered, and to achieve this, Apple is now betting on the sports sector.
Expanding your clientele is sport
To accelerate its growth, betting on sports offers is now part of one of the strategies adopted by the Apple brand, which in itself is not surprising, the same alliance between GAFAM and this sector is seems obvious. After all, Amazon made an impressive entry in May 2021 by broadcasting part of the Roland-Garros matches, or more recently, by acquiring the rights to broadcast “Thursday Night Football ” of the NFL on Prime.
Of course, Apple could not be left behind and the response was swift. At the beginning of 2022, the Tech giant signed an agreement with Major League Baseball to broadcast “Friday Night Baseball”, and a few months later, it acquired the broadcasting rights for Major League Soccer (football championship in the United States). to stream select games on Apple TV+ for ten years. Heavy investments are aimed at earning through new subscribers, but also sales resulting from product placements made during advertisements.
Apple’s weight in the music industry also plays a big role in its conquest of the sports market.
In 2014, Apple completed the acquisition of Beats by Dr. Dre against the amount of 3 billion dollars, a company that produces headphones, headphones, and high-end speakers, was the leader of the American market at the time. The story may have ended there, but it appears that the brand has convinced many big names in sports across the Atlantic such as LeBron James (NBA), Serena Williams, Simone Biles (Gymnastics) or Odell Beckham Jr (NFL) to name a few , thus making it possible to rush into the secondary market, at complete discretion.
More recently, in August 2022, Apple signed a five-year, $50 million deal with the NFL to partner with the popular Super Bowl Halftime Show. For the record, it is estimated that more than half of the 120 million viewers who attended the finale watched the show in its entirety. A massive audience and a presence at events guaranteed to go down in history.
These services look just like you
The biggest difficulty in successfully establishing a presence in this sector is probably its majority. Although not all viewers watch the same programs, not all Apple customers engage in the same activities or are necessarily willing to subscribe to a service that does so. To do this, some Apple products look like Trojan horses. Take for example the most recent Apple Watch Ultra, this connected watch designed for practitioners of extreme sports, and not intentionally to compete with Garmin, one of the leaders in the sector, has the same advantages and disadvantages as the others branded product, in economy. A high selling price, but a particularly limited need for renewal. So, once again, Apple has made sure to offer a decent subscription that most users of the product can’t resist. Here also lies another great strength of the brand, the ability to offer its customers a service that suits it. If we take an example
the very specific Fitness+, we noticed that Apple manages to target specific groups of users that we can qualify as niches, thanks to the many features offered and this in itself makes it possible to attract and keep always more customers as long as the product offered perfectly matches them. The American bank JP Morgan also estimates that the Fitness+ service should exceed 3.6 billion dollars in revenue in 2025, twelve times more than in 2021, not surprising, when we know that Apple represents 30.1% of global sales of the smart watch last year.
However, this sudden interest in the world of sports is more than financial considerations, or even an opportunity for the Apple brand to expand its range of subscriptions. It is a true extension of his universe that began, which makes it possible to associate not only with a sector, but with an image and compatible values, a sign that this commitment must be part of the long term.