Why Apple is smart to sell its Apple TV+ streaming service for "next to nothing"

CNBC

Apple has built its reputation on convincing customers to pay a premium for anything associated with its brand. But in charging $4.99 per month for Apple TV+ -- or nothing for the first year if you buy any Apple device -- Apple is setting itself up to be a long-term contender in the streaming wars. As CNBC's Steve Kovach points out, "Apple was backed into a corner on pricing" with WarnerMedia, Disney and NBC Universal coming out with their own streaming services. "Apple TV+ will only have a small handful of shows at launch, compared with the massive media libraries of proven and popular content its rivals will offer. It simply can’t stack up to its streaming rivals yet," says Kovach. With just nine shows at launch, "it’s simply not as good of a value you’d get from rival services," says Kovach. "And it’s likely no coincidence Apple priced Apple TV+ $2 below Disney+ and will launch just weeks ahead of it." He adds that the "one-year free trial sets Apple TV+ up to be one of the largest streaming services within a few months. Apple is expected to sell about 70 million new iPhones through the holiday season, according to most analysts, plus millions more Macs, iPads and Apple TVs. All of those purchases will convert to new Apple TV+ subscribers thanks to the one-year free trial offer. And a year from now, when Apple will have even more shows, many of those customers will likely feel convinced enough to start paying."