Industry pundits were a bit surprised as two international rivals Apple Inc. and Samsung made an announcement in Las Vegas, in the backdrop of the CES 2019, of a partnership. The new deal will place Apple’s iTunes in many parts of the world through Samsung TVs. Some people see this partnership as a marriage of convenience or one embracing the other for its own selfish needs. Whatever the reason behind the deal, it is going to be watched with a lot of interest.
A Kind of Software-Hardware Partnership
But the reasons behind the deal need to be understood in the right context. Samsung is already the leader in the television segment, selling in excess of 45 million TVs a year. The Korean company does not really have much in the nature of software to offer as a bundle. Apple’s woes are different. It has been seeing a drop in the sale of the smartphones. iTunes is one that is considered possibly the lowest in terms of adding to the company’s revenue stream though the services end of Apple’s operations has clocked record revenues in the last quarter. These are the factors that have resulted in the Apple Content Services partnership being entered to by Samsung.
There has been some debate on who approached who first and so on. This is understandable since the two technology giants fought fiercely against each other in the courts, on IPR issues. Apple has had to work on its own inhouse technology for the display and other technologies for components for the iPhones. It used to rely on Samsung for these earlier. And the industry observers are well aware that Apple rarely shares its programs like iTunes on third-party devices. This is the first time such a thing is about to happen. It is understood that it was Samsung that made the first move.
One can’t miss the coincidence that just some time back, Amazon’s Echo devices added Apple Music to the offerings on their home speakers. Apple does appear to be opening up, at least on its software services end of the business and should augur well for the Cupertino tach giant’s finances.