CES 2019: Apple & Samsung, iTunes & AirPlay: It’s Complicated
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[As Apple seeks to keep up in the streaming space, AirPlay support will allow more iTunes users to see their content in more places.]

Yesterday, Samsung surprised the technology world with two big announcements during their CES 2019 keynote: (A) Starting in Spring of 2019, Samsung smart TV sets would support Apple’s AirPlay 2 protocol, which allows users of the TV sets who have iPhone, iPad, or Mac devices to stream what they’re seeing on their Apple device over to Samsung smart TV set via Wi-Fi. (B) iTunes is coming to Samsung smart TV sets. Owners of Samsung smart TVs will be able to stream Movies and TV shows they purchased via their Apple ID via an iTunes app on a Samsung device.

Let’s start with announcement A: Airplay 2.

AirPlay 2, the second generation streaming protocol from Apple, allows the user to send music from their Apple device to multiple outputs, meaning that they can play music or audio across the home with that Samsung smart TV set as one of many outputs. Users can also mirror their iPhone, iPad, and Mac screens on devices that support Airplay 2. Users with Mac OS devices can extend their screen’s real estate to device that support AirPlay 2, which means that in this case, Mac users will be able to use Samsung smart TV sets as a second screen.

This is unprecedented. For years, Apple has been developing what anyone in the tech space would call a closed hardware ecosystem. One needed an Apple product like Apple TV in order to stream video from another Apple product like an iPhone. While Apple has long maintained a program that allowed interested and approved manufacturers the ability to create Airplay speakers, the Cupertino tech giant has limited the video streaming of Airplay to its own devices — namely the Apple TV.

There’s another nugget of surprise in this Airplay announcement. Samsung is not alone in partnering with Apple to support Airplay 2 on its smart TV sets. It turns out that LG and Vizio are also going to support AirPlay 2.

Another reason the announcement of Samsung smart TV set support for Apple’s Airplay is remarkable is that the company’s entertain a relationship that’s been fraught with competition, court battles, and general malice. At one point during the life of the late Apple founder and iconoclast Steve Jobs, he declared “Thermonuclear War” on the Android operating system that powers Samsung’s smartphones. He directed Apple’s legal teams to initiate lawsuits against Samsung with regard to features and intellectual property that he believed the South Korean company copied or stolen from Apple. The ears of suits, known unofficially as “The Smartphone Patent Wars,” ended in mid 2018 after seven years of multiple legal battles. During this time, Apple was alleged to have purchased the best fingerprint supplier so Samsung and others would have to wait until another supplier could furnish them with fingerprint unlocking akin to Apple’s TouchID, a feature that proved to be an inflection point in the consumer adoption of device security during the mid teen years of the 21st century.

Due to the patent wars, for years any relations between the Apple and Samsung seemed held together by the unavoidable consequences of their partnership on components. Apple had contracted with Samsung to supply OLED displays for iPhones and Apple Watches, as well as memory and processing modules for their devices.

In the wake of the legal battles, the rhetoric, and with the maturity of Tim Cook’s tenure as CEO of Apple, it seems that Cupertino and Seoul are partnering in new ways as Apple shifts from a focus on devices to online services.

[Apple’s iTunes– available on Samsung smart TV sets come Spring 2019]

Headline B: iTunes on Samsung’s smart TV sets.

For a variety of reasons Apple cannot rely on iPhone sales alone to maintain profitability. First – iPhones are lasting longer. Their bodies are durable and the market for protective cases is strong. Additionally, Apple has made replacing the battery on the iPhone, which wears out with use over time, much cheaper (starting at ~$50 down from $80), which helps to extend the life of the device and prevents people from ditching their phones for new ones every year or two. The fact that at an MSRP of ~$1,000, a 2018 iPhone XS costs nearly 2 times what the original 2007 iPhone cost (~$500) may also be a factor. Finally, Apple’s CEO Tim Cook also cites trade tensions with China, the #2 economy on the planet, for slower iPhone sales. All of this has led to what some are calling “Peak iPhone,” the generally accepted view that everyone who can afford an iPhone, has an iPhone.

This is where Samsung comes in. If Apple’s last ten years have been defined by hardware sales during the rise of the iPhone, the next ten seem to be focused on diversity of revenue — and that means services.

If headline A about Airplay meant that more iPhone, iPad, and Mac users could use their devices in new ways, then headline B about iTunes means that people who’ve bought their movies and TV shows on iTunes over the last several years can use their content in new ways. Owners of iTunes content can access their purchases on the most popular TV sets, which come with sophisticated, simple-to-use interfaces which allow them to stream content from multiple sources quickly and easily.

This wasn’t the case nearly a decade ago when Apple released the second version of their “hobby” device, the Apple TV. Back in 2010, most TV sets were little more than HD (2k) monitors. A $100 streaming device that could give users access to Netflix and iTunes content made a lot of sense. Now in 2019, smart TV functionality is standard on most TV sets. The sets are built to last with more durable materials and blazingly fast microchips which keep the interfaces snappy. They receive software and security updates regularly. The Apple TV functionality of old is basically built in so the demand for a $150+ set top box to purchase on top of a new television is”¦ not there – especially when Amazon, Google, Roku, and others have much less expensive add-on solutions.

So what’s Apple to do if they want their film and TV store to grow? Get it on more screens.

By allowing devices like iPhone, iPad, and Mac to share screens with the likes of Vizio, LG, and Samsung, Apple is giving iTunes users more big, cinematic screens to stream content to. And if they’re already using a new Samsung smart TV set, they’ll be able to skip the AirPlay step and gain direct access to their video library on the big screen. The more screens available to iTunes, the more people will likely shop”¦ on iTunes.

On the flip-side, anyone in the market for a new TV set that makes use of Apple will think twice about Samsung’s new, iTunes-compatible TV offerings. If a new Samsung TV works, out of the box with a streaming service they’ve already poured hundreds of dollars into, Samsung should see it’s sales among those Apple consumers rise. Since Apple is a premium device maker, it’s possible that a premium could be added to the cost of these smart TVs.

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