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By Tripp Mickle and Joe Flint
Apple Inc. recently hired one of Netflix Inc.'s top engineers, part of a broader strategy to build out the technical team supporting its newly launched TV-streaming and subscription services.
Ruslan Meshenberg, who helped build out Netflix's platform and was involved in key initiatives to create a speedier, more consistent service for viewers, joined Apple's internet-services organization this week, according to people familiar with the hire and his social-media accounts. He joins Apple at the same time it is expanding its $4.99-a-month TV+ service with other new hires, additional shows and movies -- a complex undertaking that has tripped up other entrants into the video-streaming business.
The company is shifting its approach to cloud services, saving money by relying more on third-party providers. The company last year shifted responsibility for more of its internet-services operations to Michael Abbott, a former engineer at Twitter Inc., according to people familiar with the matter. He has been adding experienced engineers to Apple's technical team.
Over the years, Apple has struggled -- relative to technology rivals -- with the performance of new services as they rolled out, including Maps, iCloud and its music-streaming business. For instance, its subscription magazine service, News+, faced criticism from tech reviewers and analysts because it failed to sync across different devices.
Though Apple TV+ hasn't had serious issues since its launch, Mr. Meshenberg has the experience to help Apple address technical challenges. At Netflix, he ran much of the infrastructure that guaranteed television shows and movies played reliably, even as the company expanded to more than 50 countries and streaming increased to more than one billion hours of programming weekly.
He didn't respond to requests for comment.
The importance of the engineering behind new streaming services was spotlighted when Walt Disney Co.'s flagship streaming service struggled with technical glitches as it racked up 10 million subscribers the day of its debut. Some users couldn't log in and others couldn't view TV shows and movies, or experienced repeated buffering. The service's performance has since improved.
Apple TV+ started in November with a small catalog of nine programs. The company has ambitions of adding to dozens of shows and movies, as well as broadening the service's appeal outside of the U.S. with international series. Apple recently signed former HBO Chief Executive Richard Plepler to a 5-year deal and has also reached agreements for shows with Steven Spielberg and others.
Chief Executive Tim Cook said Tuesday during a call with analysts that Apple will judge the success of TV+ by how many subscribers it collects. He said that was why Apple was aggressive with its pricing -- which undercut rival Disney by $2 -- and bundled the service free of charge with the purchase of a new iPhone, iPad or Mac.
The company on Tuesday declined to report the total number of TV+ subscribers, but finance chief Luca Maestri assured investors that those sales would contribute to Apple's growing services business.
Amid volatile iPhone sales, Apple has looked to grow through services such as iCloud subscriptions, mobile payments and app-store sales. Steady revenue growth in that business last year contributed to the doubling of Apple's share price.
Apple on Tuesday reported a deceleration in services growth. Sales of services rose 17% to $12.7 billion for the quarter ended in December, falling below the forecast of Wall Street analysts. A resurgence in iPhone sales -- which tumbled a year ago -- helped the company deliver a record quarter.
The results showed "the fallacy that services growth could ever offset a declining iPhone given iPhone's size," wrote Chris Caso, an analyst with Raymond James. "Nonetheless, with iPhone growth resuming, we think services will continue to be a helpful tailwind."
Write to Tripp Mickle at Tripp.Mickle@wsj.com and Joe Flint at email@example.com
(END) Dow Jones Newswires
January 29, 2020 14:10 ET (19:10 GMT)
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