It is quite hard to imagine the world of Apple and it’s iconic iPhone and MacBook to turn the page and set sail in a new direction. Yet, with every public outing or announcement, they reinforce the shift towards their service offerings.
Clearly, with each new generation of Apple’s hardware’ we have seen less dramatic changes and in turn shrunken product revenues. Starting already in 2019, at one of Apple events they showcased no tangible products but in turn debuted Apple TV+, the company’s long-awaited Netflix competitor; Apple News+, a digital newsstand subscription; Apple Arcade, a game subscription service for mobile games; and the Apple Card, which is something in between a credit card and a rewards card.
Apple would not be the first business to go into selling services as a way to counteract slow sales in the physical front. Let’s take Microsoft, for example. The reason Microsoft experienced a turn-around was the dramatic shift to the cloud which put the company back into the high-growth business and continue it’s journey safely into reaching the $1 trillion mark. Another benchmark example of the $1 Trillion clubs is Amazon, which after it’s debut as a book-seller ventured into AWS which now makes up for half of the companies revenues.
However, as with everything, timing matters and many have doubts about the potential success of these new services as they don’t necessarily bring anything new to the table. Despite this, the company says it expects paid subscribers to surpass half a billion within 2020.
Apple will still continue to sell it’s almighty hardware nonetheless. Nonetheless, it’s time for them to reinvent themselves.
Sources:
https://www.cnbc.com/2018/11/02/apple-is-moving-from-a-hardware-to-services-business–jay-srivatsa.html
https://www.bloomberg.com/news/articles/2019-03-23/apple-s-reinvention-as-a-services-company-starts-for-real-monday
Services really are becoming a bigger part of Apple’s business
Interesting blog post!
I agree with you that it is time for Apple to reinvent themselves. Although they deliver good quality products, I think at a certain point in time people do not keep on buying the new updated iPhone which is almost the same as the version they used before.
Besides, there is a large piece of market still relatively untouched. Now is the time to join the competition if Apple has any interest in being a severe threat to incumbents such as Netflix.
I am curious who will eventually win!
Really good blog!
I 100% agree that they need to reinvest themselves. I think we have really adjusted our liking and standards to their perception, while we can still buy products that are the same or better in quality at a much lower cost.