MacDailyNews Take: They won’t be “goggles.”
“While the services that come paired with iPhones are themselves a substantial and growing part of Apple’s revenue, they will continue to need hardware to lock in customers. I’m placing my bet on a small but already thriving component of Apple’s portfolio: wearables,” Mims writes. “In the company’s last earnings call, Apple Chief Executive Tim Cook said the company’s Apple Watch and AirPods headphones generated $10 billion in revenue across the past four quarters… Tech research firm IDC named Apple the wearables market leader, with a 17% global share.”
“Next week, Apple is expected to announce a new Apple Watch and AirPods,” Mims writes. “The new Apple Watch will likely be a more capable health monitor and phone replacement, while the new AirPods will be a bridge to Siri and other apps.”
“Sales of Apple-made wearables may never eclipse those of the iPhone, yet wearables could still be the most important driver of Apple’s overall business. The key is the portion of the company’s revenue that comes from services — a piece of the pie that’s been growing even faster than wearables sales,” Mims writes. “In 2017, ‘services’ was already a $30 billion business at Apple, and in the company’s most recent quarter, it accounted for nearly $10 billion.”
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MacDailyNews Take: So, in reality, Apple’s third act is actually: The services company. Even better: The ecosystem company.
All of Apple’s hardware, wearable or not, feed into and out of Apple’s ecosystem.