Mac O’Clock
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Apple-as-a-service

The largest public company in the world

But with the sales of all its hardware offerings stagnating, Apple needs to branch out, and the frontier they have chosen to attack is the service business.

Unlike Amazon’s neatly bundled Prime, Apple’s services are disjointed, which is odd for a company known for its ecosystem:

  • iCare Warranties
  • iCloud Storage
  • Apple Music
  • Apple TV+
  • Apple Pay & Apple Card

AppleTV+

Rather than having a host of popular shows like Netflix or Disney+, Apple is is aiming for a few critically acclaimed original content like Servant. Interestingly, this is the same route Prime Video started with. But with its low monthly cost and 1 full year of a free trial, Apple does not seem to want to generate profit from it.

Apple Card

The Apple Cards main benefits lie in:

  • Exceptional rewards for Apple and partner-merchant purchases
  • Great rewards rate on Apple Pay purchases
  • Low end of APR range

Thus, locking you in the Apple Ecosystem is the main aim rather than churning a profit out of it.

iPhone as a Service

Apple has always been a hardware-oriented business, which it is trying really hard to outgrow. With the launch of the iPhone Upgrade Program in 2015, it is trying to turn iPhones itself into a service.

The focus will turn from device ownership to device leasing. With this, Apple can be seen launching iPrime or Apple Prime in the future with the full range of Apple services in a single package.

The evident transition

For most of the previous decade, the iPhone has been the primary revenue driver for Apple.

But, it can clearly be seen in Apple’s revenue breakdown over the past 8 quarters. Its share of the revenue from services has doubled.

With big tech giants like Microsoft successfully being able to transition from their cash cows Windows & Office, while other historic giants like Nokia, Blackberry failing to do it smoothly, it will be interesting to see how Apple can ride the changing tides.

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Shivam Singh

Shivam Singh

Random musings on Finance, Technology, Media, AI, and Venture Capital.

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