Does Apple Have What it Takes to Sit on the "Iron Throne?"

By Nicole Dugan The most talked about television premier is set for next Sunday, April 12; Game of Thrones is returning. Apple and Time Warner Inc. have come up with new ways to allow more fans to tune in. What could that mean for your portfolio?

"Winter Is Coming" for Traditional Cable

You may have already heard that Apple signed an exclusive deal with Time Warner Inc., making it the sole launch partner for HBO Now, an app that will allow users to stream HBO on their Apple devices, just in time for the premier of HBO’s hit, Game of Thrones. In preparation for the premier, Apple has slashed the price of its Apple TV from about $100 to $69, perhaps in anticipation of increased sales leading up the Game of Thrones premier. Apple believes that the HBO Now app will appeal to people who either do not currently have HBO (but want access) or who are thinking of cutting the cord with their cable companies.

Apple’s battle with traditional cable providers doesn’t stop there. The company plans to roll out a subscription cable business by offering a bundle of 25 networks, including ABC, CBS, and Fox, which will be available on Apple TV and other Apple devices in the fall. The cost of the Apple TV cable subscription will be about $30-$40 per month, which may be a good solution for cost-conscious customers who only want to pay for the channels they watch.

Apple’s step into the world of cable television and the launch of the Apple Watch later this month will ensure its spot in the headlines. This could mean that Apple shares will do well in April, a month when the stock market usually slows down.

The share price of Timer Warner Inc (TWX), which owns HBO, climbed when the partnership was first announced.  As we near the Game of Thrones premier, it's possible that we could see another jump in Time Warner’s share price as people begin to purchase Apple TV and utilize the HBO Now service.

Other Contenders for the "Throne"

Although Apple is the only provider the HBO Now service, other providers will be able to offer a standalone HBO service. This week, it was announced that HBO will also be accessible on Sling TV at the same price it will be available for HBO Now users, $14.99/month.  HBO will be available to Sling TV customers who purchase the Best of Live TV core package, starting at $20. The package includes ESPN, AMC, A&E, TBS, Food Network, Travel Channel, ABC, Disney, CNN, Lifetime, and more. The main difference between the services that Sling TV is offering versus Apple seems to be the number of devices you can stream on. Apple allows you to stream HBO Now on up to three devices. Sling TV restricts users to one device.

Still "King of the North"

Apple may be sharing some of the spotlight when it comes to HBO, but the tech giant is currently outpacing the market with a 12% year-to-date return. The company also has many new innovations and products it plans to roll out in addition to the Apple Watch and the Cable Programming Alternative mentioned above. One example is wireless charging for the next generation of iPhones. While some analysts are concerned that the strong dollar could hurt Apple’s sales overseas, Apple’s strong brand may allow it to re-price some of its products and still generate strong sales. Louis Navellier, editor of Blue Chip Growth, believes that Apple is ahead of the market and projects that the company will beat expectations this quarter.

The bottom line? When you begin to structure your battle plan (portfolio) think about how you consume products and services every day and use that knowledge to make investing decisions. How will you be tuning in to Game of Thrones?

 

***Image taken from vox.com