Key Highlights

• Apple raised the monthly price of Apple TV to $14.99, or $119 per year, up from its previous price of $12.99 per month or $99 annually.

• The individual price for the Apple One bundle, which includes Apple TV, iCloud storage, and Apple Music, increased to $21.95 from $19.95.

• The price increase follows a similar hike to Apple Music pricing in July, which the company attributed to rising licensing costs.

• Apple's services division reported $30.7 billion in Revenue last quarter, up 12% year over year, though gross margins for the segment declined slightly.

Apple TV Pricing Moves Closer to Rivals

Apple (NASDAQ:AAPL) raised the price of its Apple TV streaming service on Friday, increasing the monthly subscription to $14.99, or $119 annually, up from the previous rate of $12.99 per month or $99 per year. Apple TV is also included as part of Apple One, a bundled subscription that combines the streaming service with iCloud storage, Apple Music, and other offerings. The individual price of Apple One rose to $21.95 from $19.95 following the change.

The increase brings Apple TV's pricing more in line with competing streaming services. When the platform first launched in 2019 as Apple TV+, it was priced at $4.99 per month, undercutting nearly all of its major competitors at the time.

A Growing Content Library Behind the Price Increase

Since its launch, Apple TV has significantly expanded its content offerings, including major releases such as the racing drama "F1" and the comedy series "Ted Lasso," which returned for a fourth season earlier this month. The latest price adjustment follows a separate increase to Apple Music pricing in July, which the company attributed to rising licensing costs associated with music content.

Services Revenue Continues to Grow

The pricing changes come as Apple continues to lean on its services division as a key growth driver. The company reported $30.7 billion in services revenue during its most recent quarter, representing 12% year-over-year growth. However, the segment's gross Margin declined by just over one percentage point, which Apple attributed to a shifting mix of products and unfavorable foreign exchange conditions.

Services have played a central role in Apple's Business strategy in recent years, particularly as growth in hardware sales such as the iPhone has moderated. In its announcement that Tim Cook would step down as chief executive on September 1, Apple specifically highlighted services as a major area of focus during his tenure, underscoring the segment's importance to the company's broader financial performance.

Part of a Broader Pattern of Subscription Price Increases

Apple's move to raise prices across its subscription services reflects a broader trend among streaming and technology companies seeking to offset rising content and licensing costs. With Apple TV's original content slate continuing to expand and competition among streaming platforms remaining intense, further pricing adjustments could follow as the company balances subscriber growth with profitability across its services portfolio.