r/movies • u/MarvelsGrantMan136 r/Movies contributor • 16d ago

News Apple Losing Over $1 Billion a Year on Streaming Service

https://www.reuters.com/technology/apple-losing-over-1-billion-year-streaming-service-information-reports-2025-03-20/
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u/Agreeable_Band_9311 16d ago

A company as enormous as Apple also needs to throw money at new things. They had $65 billion in cash at the end of 2024.

They can easily afford this loss and need to keep reinvesting that cash to grow or else return profits to shareholders via dividends and buy backs.

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u/ThePrussianGrippe 16d ago

Apple is famous for how much cash on hand they keep, I’m sure all of this was within their plans.

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u/Agreeable_Band_9311 16d ago

Yeah I haven’t looked in years but was surprised it was that low. It’s been over $200 billion before which raised concerns because it indicated they didn’t have good R&D ideas to dump it into.

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u/ThePrussianGrippe 16d ago

It wasn’t that bad. I remember when that was reported. 10% of it was liquid in their ‘bank account’ and the rest of the 200b was in short and long term investment securities.

Still, they’re very rigorous on keeping a good chunk on hand. I imagine it’s corporate policy created after their disasters in the 90’s when they almost tanked.

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u/CelestialFury 16d ago

I imagine it’s corporate policy created after their disasters in the 90’s when they almost tanked.

Yeah, I don't think many younger folks know how bad it was in the 90s for Apple. Jobs and Cook absolutely saved them from disaster.

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u/occono 13d ago

The "what computers?" Joke on The Simpsons being an example of a joke that makes little sense nowadays.

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u/CelestialFury 13d ago

That's a good observation. Probably a joke that dies with millennials, and only about half of them. However, the joke could be re-contextualized as a company that primary makes iPhones and smart watches over computers. It may not be as funny as the original though.

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u/JustLizzyBear 16d ago

Microsoft saved them from disaster.

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u/CelestialFury 16d ago

The $150 million definitely helped them, but as per usual, it was also self-serving for Microsoft: they were dealing with anti-trust lawsuits, monopoly accusations, the loss of Apple software sales, and Apple dropped their OS lawsuit against them (which was likely even most costly than the investment itself). It all worked, Microsoft made a ton of money, and Apple became the market capitalization leader with Microsoft neck and neck with them. Insane turnaround by Apple. Steve Jobs and Tim Cook cooked.

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u/Lane1983 16d ago

Most of the cash is held outside the US. They can’t bring in back without a massive tax bill. That’s why they issue bonds in the US to pay dividends.

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u/defylife 16d ago

They didn't used to pay dividends, so that allowed them to stockpile a ton of cash too.

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u/ArtOfWarfare 16d ago

They paid dividends in the 80s. They had to pause them when they had a brush with death, then they resumed them after they had that huge war chest.

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u/defylife 16d ago

They resumed them in 2012 after 17 years without.

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u/cocogate 16d ago

When your whole schtick is basically "one stop shop but luxury" i don't see why making a 1 billion loss is a lot considering you tie people even more into your ecosystem. If spotify suddenly decides to do something whack i really dislike i'd be pretty hesitant to switch over regardless as i got my playlists and whatnot.

Probably a good amount of businesses that buy into apple stuff and might otherwise buy non-apple items for stuff like TV which could lead to switching over to non-apple everything.

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u/Toby_O_Notoby 16d ago

It says in the article that their initial business plan for ‌Apple TV‌+ predicted losses of between $15 billion and $20 billion over its first decade. So $1b a year is actually less than they thought they would lose by a pretty wide margin.

There's also this:

Services is Apple's fastest and most profitable category, with gross margins exceeding 75%, compared to just under 40% for hardware. In its most recent fiscal year, services revenue rose 13% to more than $96 billion.

I'm sure a lot of people are like me with a $25 Apple One account. For a family of four it makes sense as it backs up all our computers to iCloud and we all have access to Apple Music. Stuff like Apple TV+ and Apple Arcade are just nice add ons to have.

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u/ppitm 16d ago

Yeah, people keep forgetting that we have moved past capitalism, back into feudalism. Medieval barons didn't need to splurge on donating to cathedrals, and Renaissance princes didn't need to patronize sculptors. But they had the money and it brought prestige and legitimacy, so might as well...

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u/Total-Sample2504 15d ago

I really wish the Apple Car had been successfully brought to market. They would've been a great alternative to Tesla.