Apple’s secret Services sauce sells systems

“Despite making the hardware business look easy, Apple hasn’t always been incredibly successful in introducing new devices,” Daniel Eran Dilger writes for Roughly Drafted. “But comparing its biggest hits with its worst misses helps to isolate a secret sauce that is driving demand for the company’s products globally.”

“The most apparent reason underlining the hardware success of iPod and iPhone (in contrast to the relative flops of Xserve and the Mac mini in the same decade) was that both of the former were tied to a content Store selling music, games and then software,” Dilger writes. “This allowed Apple to materially participate in the success of those platforms as their ecosystems grew (a factor that the Mac platform itself did not get at all until 2010).”

Dilger writes, “Pretty clearly, Apple’s platform-related Services are not just a way to extract some extra revenues from its existing hardware buyers (as clickbait content generators like to cynically complain), but a key value add that spurs initial hardware purchases and invites new buyers deeper into the Apple fold.

Read more in the full article here.

MacDailyNews Take: It’s the halo effect writ large.

6 Comments

  1. Apple’ssSsss..
    Apple ssssss..
    Serpent’s sibilant seduction of Eve in the Garden of Eden, after which she suckered Adam into biting the apple, and the rest is misery

  2. If you intentionally hobble the hardware or overprice a product, then people like Dilger may call them “flops”.

    Services, however, are nothing without devices. The more Apple ignores the devices, the more vulnerable it will be. Most people are not interested in being sucked into a lifetime monthly payment. Just as people have had enough of cable TV service and are cord cutting, they can and will just as easily cut off Apple services if the geniuses of Cupertino under-deliver value on hardware, software, or service front.

    I think it’s quite obvious that Apple is a poor service provider. It can’t do two things at the same time. Prices are out of whack. Hardware lines are a mess. Apple today is entirely reliant on the iOS app store to fund itself. Due to lack of leadership, the Mac app store has been underperforming. Because of sky high prices and slow updates, Mac sales have been underperforming. Apple’s attempt to recreate the iOS app store for different shaped/sized devices (ATV, Watch) are so disappointing that Apple hides their financial results in the “Other” category in its financial statements.

    Apple should get off its fat lazy ass and stop trying so hard to loop people into renting everything. It can, and should, offer better value in hardware and software, with services that offer the user a la carte selections, skinny bundles, and more open standards that work with legacy equipment. Otherwise the secret sauce will look, taste, and smell just like Comcast’s sauce. Except, of course, you need an ISP so cutting out them is impossible — however you don’t need to buy overpriced hobbled fashion hardware so alternatives to Apple will continue to be offered, and they will be just as good and usually less expensive than Apple. Compare ATV to the superior competition for example. Why would anyone buy an ATV?

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