Is Apple a Hardware Company or a Software Company?

Apple’s Strategy Explained!

In this article, we will uncover -

• Apple’s journey from a pure hardware to a hardware + software enterprise
• Strategic rationale for strengthening its services portfolio
• Overview of Apple’s services portfolio
• Future growth outlook & risks

The first thing that comes to mind when thinking of Apple is the iPhone, iPad, AirPods, MacBook, and so on. Hence, for the very first time I saw the graph below, I was astonished. Does Apple have a bigger business than selling its beautifully designed hardware? This curiosity helped me dig deeper and reach a conclusion that Apple has a great business model for selling hardware, but the business model has a fundamental flaw, and this flaw doesn’t bode well for Apple’s growth plans.

With hardware as the sole focus, Apple operated on a transactional business model centred on the periodic sale of high-value hardware. However, as the global smartphone market reached saturation and breakthrough hardware innovations became less frequent, device replacement cycles naturally began to lengthen. Consumers, satisfied with the advanced capabilities of their existing devices, started holding onto them for longer periods. This trend posed a…