Brief:

• Apple acquired U.K. startup DataTiger in a sign that the iPhone maker seeks to boost its digital marketing for its fast-growing services business that includes Apple Music, Apple Pay and the App Store. A regulatory filing from December shows that Apple took control of Operatedata, the legal name of DataTiger, per Bloomberg.​
• DataTiger, which uses artificial intelligence, says it can "optimize the marketing journeys" of customers by harnessing user data to target them with marketing messages including mobile push notifications. DataTiger CEO Philipp Mohr said in his LinkedIn profile that the company seeks to "bring the stale era of 'email-list thinking' and slow, campaign-based marketing to an end."
• Apple’s acquisitions in recent years include the Shazam music-recognition app, the Texture magazine subscription service and Akonia Holographics, which makes technology for augmented reality (AR) lenses.

Insight:

Apple’s reported acquisition of DataTiger is another indication that the company seeks to build its digital marketing capabilities to drive growth as iPhone sales decline. The startup's AI-driven marketing capabilities could help Apple customize messaging at a time when the tech giant is ramping up its content offerings. Being able to direct users to content that is relevant to them — something AI can accomplish efficiently by quickly sifting through and analyzing data — could help Apple drive engagement with users, who have a growing number of mobile content choices. 

Apple needs to milk its user base of 1.4 billion active devices, including 900 million iPhones, for more subscriptions and app sales. The tech giant also has been privately discussing a "Netflix for games" service with game developers since the second half of 2018. Apple’s "Netflix for magazines" service — based on its acquisition of Texture — also is in the works, as a beta version of its iOS 12.2 indicates, 9to5Mac reported. Apple is in discussion with news organizations about revenue-sharing arrangements for the service that would give the company a 50% cut of subscription sales, The Wall Street Journal reported. All of these efforts could get a boost from AI-driven personalized messaging, including recommendations. 

Apple's high-margin services business grew 19% to $10.88 billion in Q4 2018 from a year earlier, putting the company on track to reach its of annual goal of $50 billion by 2020. The company said it has 50 million paid subscribers to Apple Music and 85 million active users of Apple News, its digital news aggregator. Apple Pay transactions doubled to 1.8 billion in 2018, another healthy sign.

Apple’s ad sales business is now mostly centered on the App Store, where mobile users find applications to expand the functionality of their Apple devices. The App Store's ad sales were forecast to surge to about $2 billion by 2020 from $500 million last year, per Bernstein analyst Toni Sacconaghi.