“As Apple approaches a market cap of $1 trillion with a return on shareholder’s equity of 36.1 percent in 2017, it can be thought that Apple’s management is doing a lot of things right… enough things that other corporations should be following them,” John M. Mason writes for Seeking Alpha. “Apple’s success is not just tied to the physical goods it produces. Oh, that is an important part of what they do, but they have gone beyond just the production of goods to show how, in this modern world of information technology, different facets of ‘information’ can be tied together to make something really substantial… and really profitable.”

“Tim Bradshaw writes in the Financial Times about Apple’s ‘second-largest source of revenue… its services business composed of revenues from items like App Store downloads, iCloud storage and Apple Music subscriptions, among others.’ These areas, altogether, ‘brought in more than $9 billion in the last quarter, up 31 percent on the year.’ And, they are ‘a model of consistency compared with the feast-or-famine performance of the iPhone. Since 2006, it has grown at an average rate of 23 percent, year-on-year… Services revenues have doubled in four years,'” Mason writes. “Tim Cook, Apple CEO, and his CFO Luca Maestri, have gone on record as setting a target of $50 billion for the division by the end of 2020.”

“The point is that Apple is creating the modern corporation and is showing others that it is not just the production of a product that is all that is needed,” Mason writes. “The important thing is that these ‘modern’ corporations are using ‘information’ to tie all things together.”

Read more in the full article here.

MacDailyNews Take:

It takes hardware plus software plus services to make a killer product. — Tim Cook

SEE ALSO:
Apple gets downgraded on concerns over services business – May 30, 2018
Morgan Stanley: Buy Apple shares on the ‘emerging power’ of its services – May 24, 2018
Apple as a service: Services offer growth, visibility, and profitability – May 15, 2018
AAPL’s paradigm shift – May 11, 2018
Apple Services: The nitrous in Cupertino’s profit engine – November 27, 2017
Inside Apple’s massive services results – August 9, 2017
Misunderstanding Apple Services – August 7, 2017
Dispelling the Apple Services myth – May 3, 2017
Apple’s Services business: $7 billion in revenue last quarter alone – May 3, 2017
Apple’s Services (App Store, Apple Music, Apple Pay) business is an unstoppable juggernaut that’s still just gathering strength – May 3, 2017