- Sources say Apple vet Eddy Cue is reorganizing the management structure of his services business.
- The company is pressing more aggressively in areas such as broadcasting and advertising.
- The Cue app gives more responsibility to Deputy Services Peter Stern and Head of Advertising Todd Terrace.
Apple’s Eddy Cue discusses restructuring its $76 billion services business to get a bigger boost in lucrative areas like
And advertising, executives have already lifted to this end, sources said.
Apple’s services include projects including the App Store, Apple Music, iCloud, AppleCare, and
and Apple News, ads, and Apple TV +.
Apple services grew 17% to $19.8 billion in the fourth quarter of last year and registered 825 million subscribers globally. The company would be the 113th largest company in the Fortune 500 by revenue if it were a stand-alone company.
One of the people who spoke directly to Cue said the senior vice president of services is considering how to unleash growth by realigning its management structure and pushing aggressively into areas like broadcasting and advertising. The company took home a Best Picture Oscar for its $25 million “CODA” movie, and is just beginning to air ad-supported Major League Baseball coverage on Friday nights.
Cue has already changed the responsibilities of an executive who leads Apple’s sports portfolio. Peter Stern, a vice president of services who took care of units including Video, News, Books, iCloud, Advertising, Fitness+ and Apple One, according to his LinkedIn profile, has blamed the advertisement, three people familiar with the matter say. . Stern’s heavy wallet needs his full attention.
The iPhone maker is expected to exercise a range of sports broadcasting rights, including the NFL’s Sunday Ticket and the NBA, when the renewal is due. Stern joined Apple in 2016, previously leading the Internet, phone, video, and “smart home” business for Time Warner Cable and co-acquiring media rights for the L.A. Dodgers.
“The unique situation with Apple is that they have a relatively small base for Apple TV+. The addition of the Sunday Ticket will allow them to increase their base subscription level, which is a metric in the business known as leverage,” said Ed Deisser, head of sports. TV Consulting Desser Sports Media. Desser added that Apple can monetize sports rights in three main ways: new subscribers, additional subscriber revenue for an additional sports package, and advertising revenue.
Stern is said to have given his advertising responsibilities to one of his direct reports, Todd Terrace, the vice president in charge of Apple’s advertising business for more than a decade. Insiders said he was quietly promoted at the start of the year and is now reporting directly to Cue.
One person said: “The portfolio of services is very large now, with too many other growing segments. The advertising business is big enough to live on its own.”
Teresi’s promotion reflects the recent explosive growth in Apple’s advertising business. Apple’s largest ad source — search advertising — grew 238% to $3.7 billion in 2021 versus 2020, according to Omdia Research lead analyst Matthew Bailey. Omdia expects Apple’s search ad revenue to reach $5.5 billion in 2022. A recent privacy update, which forced developers to request permission to be tracked, also prompted some advertisers to shift their spending to the search advertising product. Apple, which offers ads in its App Store, as well as its own news and stock apps, recently started selling TV-like ad slots in its MLB TV channels.
A source said two Apple insiders told them that Terrace was “back in the chair”. Tracy previously led Apple’s iAd mobile advertising network, which launched in 2010 but closed six years later after failing to capture more than a single-digit share of the mobile ad market.
Other planned operational changes in the Services division cannot be immediately known.
An Apple spokesperson declined to comment.