Fast Forward: What Brands Need to Know from Apple’s Spring Event
Podcast subscriptions, Apple Card Family, 5G-ready iPads, and more
Editor’s note: This is an abridged edition of our Fast Forward newsletter. For the full version, please contact our VP of Client Services, Josh Mallalieu (josh@ipglab.com) to send a request.
On Tuesday, Apple kicked off its first press event in 2021 with a slew of long-anticipated product announcements, including updates for iPad Pro, iMac, Apple TV, and even the long-rumored item tracker AirTag. CEO Tim Cook opened the pre-taped event with a brief reiteration of Apple’s commitment to sustainability and eco-friendly design, before jumping into a tight hour-long show full of cool transitions and slick product demos. After nearly a year of producing virtual events, Apple has truly perfected the art form and put on a great show.
Among the longer-than-expected list of new products and features, here are the four things that stood out to us as matters that innovation-minded brands and marketers should heed.
Apple Chooses Subscriptions over Ads to Monetize Podcasts
First up, Apple quickly mentioned some major updates to its Podcasts app, including a new Channel feature that allows podcast creators to group shows together, as well as an enhanced Search tab for quick access to Top Charts for better discovery. More importantly, Apple launched podcast subscriptions within the app, letting listeners pay a monthly fee to access additional benefits, such as ad-free listening, advance access to new episodes, and unlocking archive episodes. Creators can offer subscriptions to either an individual podcast show or a Channel. Apple said the new feature will roll out in May to listeners in more than 170 countries.
Podcast has been a steadily growing medium over the past few years, and even the loss of commute time in 2020 didn’t curb its momentum. According to Magna’s latest Time Spent with Media report, despite a brief slowdown in podcast downloads, podcast listening reached an all-time high in 2020, accounting for 6% of total time spent on audio (versus 2% in 2014). Per the 2021 Infinite Dial study from Edison Research, 28% of the total U.S. population can now be considered habitual weekly podcast listeners, up from 24% the year before. Audio companies such as Spotify and iHeartRadio continued to integrate podcasts as a central part of their offerings, further contributing to its growth.
Still, it comes as a small surprise that Apple is finally paying some attention to podcasts, considering how long the company has seemingly ignored the growing medium. Although podcasting partly owes its namesake to iPods, its open-web characteristics have long clashed with Apple’s walled-garden approach and deterred the company from taking a serious stab at monetizing the medium. Not to mention that Apple’s affinity for ad-free services also goes against podcasts’ main source of revenue.
However, with podcasts emerging as a mainstream medium, it is increasingly becoming a key part of Spotify’s competitive advantages against Apple Music. With a multi-pronged strategy ranging from exclusive content to open podcast hosting to targeted advertising, Spotify also announced plans to test podcast subscriptions later this year. Therefore it is no surprise that Apple has finally been spurred into action and made a move to court podcasters by offering new monetization options and creative tools. Besides the revamped Podcasts app, Apple also unveiled an updated Apple Podcasts Connect dashboard that provides podcasters with new management and performance tracking tools. Yet, staying true to its ad-free preference, Apple has decided to go against the dominant ad-supported model and chose premium subscriptions as its monetization method.
Yet, for brands, there is no need to worry about Apple’s announcements potentially undermining podcasts as a brand-friendly medium. Most listeners are used to getting podcasts for free, and host-read ads make commercial breaks far less disruptive than in other ad-supported media. Although Apple’s native Podcasts app still commands about 20% of U.S. podcast listenership, eMarketer predicted that Spotfiy will surpass Apple later this year in podcast listeners. Even Facebook also recently signaled its intention to enter the space as it aims to leverage its massive audience reach and robust ad products to earn a cut of the podcast industry’s growing ad revenues. This is about growing the creator ecosystem of podcasting, which should only help grow the user base in the long run.
Overall, while Apple’s new offers will entice some podcasters that have an established following to give the ad-free subscription model a try, Apple alone won’t be enough to remake the distribution landscape and change the dominant business model for podcasts. If anything, Apple stepping up its podcast game will make the space more competitive and dynamic, which often spurs innovations and new brand opportunities.
Family Sharing Comes to Apple Card
Another notable new feature Apple announced was Apple Card Family, which brings Family Sharing to Apple’s credit card. Going beyond its straightforward daily cash-back rewards, this feature creates a new selling point for Apple Card by enabling users to share one credit card account with up to five other people that are 13 years or older in a Family Sharing group. While it is similar to how one would add authorized users to their credit card accounts, Apple makes it easier for account holders to monitor and control everyone’s spending directly in the Apple Wallet app.
More interestingly, Apple Card Family also allows Apple Card holders to designate an adult family member as a “co-owner,” which would allow two users to merge their credit lines and build credit together. While a handful of card issuers already made it possible for authorized users to build their own credit, it remains a lesser-known perk that Apple is explicitly marketing as a key benefit of Apple Card.
For financial service brands, this new Apple Card feature should serve as an inspiration for designing and marketing products in a way that makes sense for the mobile-first consumers. With Apple Card Family, Apple didn’t invent anything new or change how multi-user credit cards work, yet it did make adding authorized users and co-building credits more intuitive and accessible with not only its mobile-native approach, but also the thoughtful framing it uses to package existing credit card features: “Authorized user” sounds cold and technical whereas “Family Sharing group” denotes warmth and care.
Mobile payment usage grew significantly during 2020 partly due to a Covid-boosted demand for contactless payment. As a result, this accelerated shift in consumer payment behavior will likely further disintermediate consumers from traditional banks and financial service providers. To remain competitive, financial service brands need to adapt to shifting consumer behavior by rounding out their digital payment ecosystem, both in terms of infrastructure and services.
M1 Chip Brings Computational Video to iMac and iPad Pro
Besides these two software updates, Apple spent the majority of the event unveiling new versions of its existing hardware lineups. As usual, they tend to have less direct implications for brand marketing. Nevertheless, it is interesting to note that Apple’s powerful proprietary M1 chip has been added to a colorful new lineup of iMacs as well as new iPad Pro models, boosting the graphic processing power of these devices, which, in turn, enables users to create complex AR and 3D assets with ease. As we inch closer to Apple’s official announcement of a head-mounted AR or mixed reality device, the path to Apple’s AR-driven future, which Tim Cook recently reaffirmed in a podcast interview, is already being paved with AR creation tools in other Apple devices.
In addition to the boost in GPU performance, M1 chip’s next-gen Neural Engine greatly accelerates machine learning tasks and, along with upgraded camera and microphone systems, allows Apple to add more computational video features to iPad Pros and iMacs to improve video call quality. One such feature, dubbed Center Stage, leverages computer vision and iPad Pro’s 12MP ultra-wide front camera to automatically track the user’s movement and center them in the frame during video calls.
This newfound emphasis on the video call experience, coupled with the added 5G support on iPad Pro, shows Apple is leaning into the growing trend of remote work and remote education. Participating in video calls is now a daily activity for remote workers and students taking online classes, not to mention the many in-person services and offline experiences that shifted to video calls during the pandemic and may continue to be delivered online.
Whether they’re delivering product demos or offering a virtual sample of an offline experience, video calls are breaking out its siloed use as a communication tool and becoming an integral part of brand strategies and offerings that consumers have grown to expect. As accelerated digital transformation sweeps through more industries and brings us into an Anyware Economy, smart brands will need to master building long-term relationships with consumers and deliver top-notch brand experiences over live, interactive video formats.
AirTag Commercializes Precision Tracking & Preps Users for AR
If there had been a “one more thing” announcement in this Apple Event, it would have been the official launch of the long-rumored item tracker AirTag. Powered by Apple’s proprietary U1 ultra-wideband chip, this new Bluetooth tracker can help Apple device owners find lost items through Apple’s “Find My” app with a Precision Finding feature. It works with the U1 chip on newer iPhones, as well as other input from the camera, accelerator, and gyroscope, to guide users to a lost AirTag using a combination of sound, haptics, and visual feedback. AirTag also has privacy features built in to deter unwanted tracking and anonymizes other Apple devices that contribute to the Find My network.
Apple’s entry in this “lost item finder” space means competitors, like Tile, will have more serious competition. Interestingly, Tile has announced its plan to launch a new tracker powered by ultra-wideband technology and add AR-enabled navigation to its app to guide users to lost items. Still, Apple’s home turf advantage is difficult to ignore, especially when the pricing for AirTag is rather un-Apple and competitive.
Like the M1 chip, the introduction of AirTag won’t have any direct impact on brand marketing. Yet, this new addition to the Apple product family is set to bring item trackers to a wider audience and will normalize tagging non-digital objects for location tracking. In a way, it offers a rudimentary way to turn any everyday object into a connected object. As more non-digital objects become connected and trackable, we move ever closer to the future of IoT networks. Most physical objects will eventually have a digital presence, which is partly how we will get to a persistent metaverse that overlaps with the real world via AR interfaces. While it may sound a little too futuristic, the reality is that we are approximately 3 to 5 years out from Apple launching its consumer-facing AR products. Small as it may seem, AirTag is a piece of the larger puzzle of preparing mainstream users for an impending computing paradigm shift to AR and IoT networks.
Want to Learn More?
Overall, Apple over-delivered in this press event with noteworthy new features and products. In spite of entailing few marketing implications, it is important to dissect the long-term impact of Apple’s announcements, given its market-leading power in shaping digital behaviors and platforming emerging technologies.
If you are keen to learn more about Apple’s long-term plan and their marketing implications, or simply to chat broadly about how to adapt to changing user behaviors and future-proof your brand strategies, the Lab is here to help. You can start a conversation by reaching out to Josh Mallalieu (josh@ipglab.com).
