Even Oprah Can’t Paper Over Apple’s Services Flaws

(Bloomberg Opinion) -- Apple Inc. prides itself on craftsmanship and perfection. Even the desk chairs in Apple's headquarters are worthy of their own article. That's why it was so surprising that Apple's new products for news, television and more feel so half-baked.

Over nearly two hours on Monday, Apple trotted out Oprah Winfrey, Steven Spielberg and Big Bird but left a lot of blanks. The company effectively introduced five products: a subscription to a collection of magazines and other information; an Apple-branded credit card; a subscription service for a bundle of video games; a Netflix-like subscription for Apple entertainment programs; and a revamped digital hub that pulls in Apple's video service plus those from partners such as HBO.

Only one of those five, the magazine and news subscription, is available now, and it already existed under a different name and guise. It's not unusual for Apple to get people excited about products before it is ready to sell them. For example, Apple announces each year's new iPhone models weeks before they officially go on sale. 

Monday's announcements felt different, however. Apple's collection of digital products felt at times like drawings on napkins — sketches that were incomplete, not ready or not thought through to their eventual conclusion. If the bullish investment thesis about Apple rests on its competence to transition to a digital services company, Monday's event put a dent in that notion. 

Apple showed only a scant few frames of its coming Netflix-like service, called Apple TV+, even though the company started developing its own entertainment programs two years ago. The company didn't announce a price for Apple TV+, which maybe doesn't matter because the subscription service isn't coming until the fall anyway.

Apple's digital entertainment hub, called “TV,” already exists as a single spot to see movies and TV series from companies such as HBO and the Spectrum cable television service — although many iPhone owners are not aware of this app. 

Apple is reworking it with the promise that it will be a truly single spot for everyone's entertainment needs. It won't be. It doesn't include Netflix or Comcast's pay-TV service, for example. The new TV app appears to be a better interface on an existing app that many Apple device owners have ignored. It's not clear why those people will start to use the TV app now — particularly before this fall when Apple says it will begin to release its original entertainment programs. 

To Apple's credit, it realizes it needs this digital entertainment hub for non-Apple devices, too, and said people who use popular internet-connected TV sets and Amazon.com Inc.'s Fire TV and Roku streaming-video hardware will be able to use the TV app, too. The problem is the TV app is coming for those devices “in the future.” Whether that's six months or six years from now, I don't know. Apple may not know, either. 

Apple's $10-a-month subscription to magazines and a selection of newspapers and other information does exist now. And it should. Apple News+ is a revamped version of Texture, a $10-a-month magazine and information subscription company that Apple acquired last year. There was confusion on Monday about the availability of the full spectrum of articles published by the Wall Street Journal, perhaps the highest-profile addition to the subscription service. That's just one sign of how unpolished or unprepared Apple's products felt. 

Apple's Texture 2.0 is also available only in the U.S. and Canada for now and only for iPhone, iPad and Mac computers. Apple's trumpeted subscription service for video games and its new credit card also appear available only for Apple devices. Yes, that's still a lot of people. To quote Winfrey on Monday: “They're in a billion pockets, y'all.” (Slight correction: Apple has said about 900 million iPhones are in active use worldwide.)

But the idea of Apple becoming more than just a device company breaks down when the company introduces digital services that are available only to the minority of the world that owns Apple devices. This is not the services-first company that Apple investors expect.

Apple could do very well with its new subscriptions, if and when they launch. A subscription for immersive video games seems like the most promising of the bunch. Video games are the most prevalent use of smartphone apps by far, and Apple's heritage and relationships with popular game makers and game players give it a unique advantage in creating a video game subscription service. Google, Amazon and Microsoft are also working on or have announced video game subscriptions. Apple's video game service is coming — you guessed it — this fall. No price was announced. 

The company's typical high-wattage event papered over obvious shortcomings and unanswered questions about its new services. Maybe Apple is trying to do too many things at once and the multitasking left it unable to meet self-imposed deadlines. Maybe the company wanted to announce its products first and then refine the details with partners later on.

Most likely, though, the half-baked nature of Apple's event shows that the company's perfection in its traditional hardware stronghold doesn't mean its prepared to be more than the iPhone company. 

Apple said the subscription service wouldbe available in the United Kingdom and Australia later this year.

To contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.

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