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Apple Used To Be an Inventor. Now It's Mainly a Landlord. (bloomberg.com)
An anonymous reader quotes a report from Bloomberg: For years, analysts and journalists watching Apple have talked up the growing importance of services, as opposed to hardware sales, to the company's top line. But it's only now that Apple's business model truly appears to be shifting toward collecting rent from the company's ecosystem and increasingly relying on gadget sales to perpetuate this rent rather than drive growth. Apple's decision to stop reporting iPhone unit sales underscores the shift. Services have been steadily growing in importance for Apple since 2016, while the share of revenue provided by the flagship gadget, the iPhone, has gone up and down depending on the popularity of different models.
There's a lot of potential for Apple to squeeze a higher rent directly out of its captive user base. Goldman Sachs estimates that only 10 percent of Apple's user base pay for iCloud Storage; in terms of price and service quality, iCloud has been a poor competitor to services provided by Google and some smaller companies such as Dropbox, but that only means Apple can increase revenue from it exponentially if it bothered to compete more aggressively, as it does with another key service, Apple Music. Even that streaming service has relatively low penetration, though, with only about 35 million users last year. Goldman Sachs predicts that number will grow to 83 million by 2020. Goldman's proposal for Apple is to create a services bundle similar to Amazon Prime; for $30 a month or so, subscribers would get access to music, video, 200 GB of storage and phone repair. The investment bank calculates that with just 50 million subscribers, such a bundle could add $18 billion in services revenue in 2019. "Rent extraction from a user base that finds it hard to go away may sound a bit like extortion," Leonid Bershidsky writes in closing. "But it's more honest and upfront than extracting data from users in ways they often don't understand and then making money off the data, as Facebook does. That honesty is in itself a competitive advantage for Apple as it gradually reimagines itself as more of a services company."
The challenge, Bershidsky writes, "is to grow the services offering fast enough to make up for potential iPhone revenue losses; gadget prices cannot keep going up forever without hurting the top line, and in the end, a phone is just a phone. We only need it to gain access to all the nice digital stuff out there."
There's a lot of potential for Apple to squeeze a higher rent directly out of its captive user base. Goldman Sachs estimates that only 10 percent of Apple's user base pay for iCloud Storage; in terms of price and service quality, iCloud has been a poor competitor to services provided by Google and some smaller companies such as Dropbox, but that only means Apple can increase revenue from it exponentially if it bothered to compete more aggressively, as it does with another key service, Apple Music. Even that streaming service has relatively low penetration, though, with only about 35 million users last year. Goldman Sachs predicts that number will grow to 83 million by 2020. Goldman's proposal for Apple is to create a services bundle similar to Amazon Prime; for $30 a month or so, subscribers would get access to music, video, 200 GB of storage and phone repair. The investment bank calculates that with just 50 million subscribers, such a bundle could add $18 billion in services revenue in 2019. "Rent extraction from a user base that finds it hard to go away may sound a bit like extortion," Leonid Bershidsky writes in closing. "But it's more honest and upfront than extracting data from users in ways they often don't understand and then making money off the data, as Facebook does. That honesty is in itself a competitive advantage for Apple as it gradually reimagines itself as more of a services company."
The challenge, Bershidsky writes, "is to grow the services offering fast enough to make up for potential iPhone revenue losses; gadget prices cannot keep going up forever without hurting the top line, and in the end, a phone is just a phone. We only need it to gain access to all the nice digital stuff out there."
Meh, then your definition of "invent" is too strict. True, they didn't invent the home computer. But after a few tries they managed to find a formula that worked and an entire industry was born. They didn't invent the GUI - but they finally innovated a recipe that worked with the Mac and the PC world never looked the same. Then they did it again with the iPod, the iPhone, and the iPad - all categories that technically existed, but sucked. I could write any one of those off as a lucky fluke, but they've done it several times. They've failed several times, too... for instance they got too crazy with the Newton and Palm figured out the formula instead. Even the lightbulb was an iterative design and not something popped into existence by Edison.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
The thing the smartphone market was missing was a good universal(NOT CARRIER RUN SEGMENTED JUNGLE OF SHIT) before apple. that 30% and 100 bucks was a pretty goddamned good deal(getting stuff signed for symbian or j2me cost way more - per one release! and the shops you could sell on gave you shit percentages).
Appstore and google play store fixed that. If you've wondered what really killed Nokia this was a major factor in it, as their attempts were so half hearted because they didn't want to go against operators. They had their Download! etc but .. you would be really, really surprised on what kind of a budget those attempts were ran(displaying nokias motivation) and what kind of money you needed to sort payments for them(again displaying nokias motivation level - you wouldn't believe how good deal that 100$ bucks starting developer fee from apple was compared to the sums you needed to get a popular symbian os licensing platform and accepting payments on it - both in startup cost and per transaction cost for typical mobile payment sizes).
There is no easy way currently to break in a new smartphone platform in.. Android is already too well established in the lower(and higher too) end.
also there's kaiOS but thats a transitory ecosystem, just like tizen.
windows phone failed due to not matching features. launching a smartphone platform with featurephone capabilities was a dumb AF move. it was also tragically funny having ms and nokia people lobby for ports of apps onto the platform that were literally impossible to do at the time on the platform. then when escalating through ms dev relations the answer came back as "you don't need to do that". well, okay then. thanks for the free phone and food I guess.
anyways about apple, they're making cheaper and cheaper devices and selling them for higher and higher price. It's not their fault that people buy it. they will continue to make them cheaper and cheaper to make.
also somehow they manage to sell 3 year old devices that will have support dropped in like 1 year. that should be illegal (they do this in asia. apple actually has mid tier phones and has had for years. they just keep selling the old models - and this is new in box models through operators, a lot of it in asia. no refurbs. but new in box phones of 3 year old phones. thats their 200 dollar segment). apple sells them and doesn't give a fuck that the sw support is due to be dropped in just a little while.
world was created 5 seconds before this post as it is.