"On services, this is a huge statement of intent", said Pescatore.
A small price cut in real terms, but a sign that Apple is feeling the pressure, especially at the lower end. Netflix now has about 150 million subscribers worldwide, according to its second-quarter earnings report.
Each month, Apple TV+ will add more original productions to the lineup - we're already counting down the days to M. Night Shyamalan's psychological thriller Servant as well as Anthony Mackie and Samuel L. Jackson's based-on-a-true-story film The Banker. Apple TV+ will be available from November 1 in over 100 countries for just $4.99 per month (family subscription).
Apple's new service costs considerably less than Netflix, which has a standard subscription of $8.99 per month.
This year's event also saw Apple reveal details of its video game subscription service called Apple Arcade. China isn't just where iPhones are made; it's also one of the top markets for the device.
That means both Apple and Disney will be undercutting the industry leaders.
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The price war is unfolding as Netflix tries to bounce back from a rough spring in which it suffered its first quarterly drop in US subscribers since 2011. Netflix's stock fell 2% on Tuesday.
Analysts expect Apple will sell around 200 million iPhones in the next year, in addition to other devices, and while many of those will be in China, it ensures at least tens of millions of potential viewers for the subscription service.
A launch date for Apple TV+ was also given, and some of the US's highest profile streaming companies saw their share prices fall in response. We'll never say that again. But it will also have a lot less content at launch, even with all its new shows (you can see a list of what's been announced here).
In recent times, the company's services businesses such as Apple Music have become increasingly lucrative. Revenue from services rose 14% to almost $23 billion during the first half of this year.
In context: Last year Apple rolled out its AppleCare+ program with the launch of the iPhone Xs and XR line. "They know once consumers get into their ecosystem, they don't leave".
But then, how does it continue to grow if it can't sell you a new iPhone every year?
For years, the iPhone represented the majority of Apple's sales, but the company has seen the numbers drop.