“Contrary to popular belief, Apple Inc. isn’t a hardware company. Nor is it a software company,” Christopher Mims reports for The Wall Street Journal. “Apple is, fundamentally, an ecosystem company—one that, with the help of millions of developers world-wide, has created a vast web of software and services that run on its 1.3 billion active devices.”
“The trouble is, as Apple increasingly emphasizes device prices over volumes for revenue gains, it confronts a fundamental tension—between charging people more for hardware and, simultaneously, more for services to access through it,” Mims reports. “The former puts profit margins ahead of prevalence, while the latter emphasizes maximizing the number of gadgets in customers’ hands.”
“Services, and the millions of developers and thousands of companies behind them, are the reason the iPhone is so sticky, says Horace Dediu, an Apple analyst and fellow at the Clayton Christensen Institute for Disruptive Innovation,” Mims reports. “One way for Apple to resolve the hardware-versus-services tension would be to roll them into one giant subscription, Mr. Dediu says.”
“Imagine a service where you simply subscribe to a regularly updated iPhone, Apple Watch, AirPods or some subset of these devices,” Mims reports. “Throw health monitoring, an iCloud subscription, Apple Music, Apple’s original programming and more into a cable TV-like bundle, or a la carte, and Apple could go from being a hit-driven company to one that throws off predictable, consistent, subscription-based revenue. Think of it as Apple Prime.”
Read more in the full article here.
MacDailyNews Take: As we wrote last month:
What we really want to see is an “Apple Prime,” as described by Goldman Sachs analysts Simona Jankowski and Drew Borst is an October 2016 note to clients. This “Apple Prime” subscription would include the Apple Music service, access to the iTunes library of TV shows and movies (some for free), Apple’s forthcoming original content, and exclusive sports programming.
Further, we’d really like to see a way to pay for all of the Apple services we choose for one price. Give us a bunch of tick boxes and let us choose our combination of iCloud storage, Apple Music, iTunes Match, etc. and let us pay a single price for all of our choices. — MacDailyNews, October 17, 2016
Netflix presumes Apple’s original content will either be bundled with Apple Music or with iOS – January 23, 2018
[Thanks to MacDailyNews Readers “Fred Mertz” and “Dan K.” for the heads up.]