During the WWDC 2021 main presentation on June 7, several new software updates were presented. However, at least one particular subject caught the attention of Apple Maven: Apple (AAPL) – Get a report announced important new features for FaceTime, the exclusive iOS video calling platform.
Among them, (1) FaceTime will now be available outside the Apple ecosystem, such as on Android and Windows devices, and (2) the new SharePlay feature will allow users to share content from third-party apps including Disney +, Hulu. , NBA and others during the call.
Could FaceTime be the next big step in the services industry to help drive Apple’s stock price up after the announcement of the increased competitiveness of Apple’s video app?
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Video platform market
First, let’s start with the big picture. The video communications market currently generates over $ 9 billion in revenue worldwide and is projected to grow to $ 22 billion by 2027.
Due to the COVID-19 pandemic, many companies, government agencies, schools and universities have adopted the “from the comfort of your home” protocol, which has unexpectedly led to the growth of video conferencing platforms such as Zoom and Microsoft Teams. Both combined, for example, had over 2.2 million new users in 2020.
This market is currently dominated globally by Zoom, with a market share of around 49%, followed by Google Meet with 21%, Microsoft Teams with 14% and Microsoft Skype with 6%. See the table below.
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What could change for Apple?
FaceTime updates could signal new service opportunities that Apple will explore in the Zoom-dominated video platform market. Today, a significant chunk of Apple’s service revenue comes from the App Store, which has recently been the subject of antitrust debate, creating some uncertainty for the future.
The $ 9 billion video conferencing market may seem small to Apple. The Cupertino-based company reported revenue of $ 17 billion in services alone in the second quarter of fiscal 2021. See the diagram below.
However, with products like FaceTime, Apple could expand its growth opportunities and add another component to its recurring subscription model. The services segment was critical as a complement to the iPhone and Mac, two businesses likely to mature at some point.
FaceTime is now a free service that doesn’t add value to Apple. However, perhaps the recent updates could be the first step towards entering a new market that Apple can take a closer look at and which could offer further revenue growth opportunities for its service segment.
Learn more from Apple Maven: 3 Key Takeaways from WWDC 2021
Apple’s WWDC was packed with software updates but didn’t cover the news about the hardware. Which of the following do you think the developer conference is most likely to make a difference to the AAPL investment thesis? Leave your vote below and follow @AppleMaven on Twitter!
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