Apple’s next-gen iPhones are the razors, services are the blades

“Apple’s latest lineup of iPhones, which reportedly will adopt the iPhone X design, are the razors that cost you anywhere from $800 to $1,300,” Larry Dignan writes for ZDNet. “The recurring revenue — the razor blade — is going to be made on Apple services going forward.”

“The big question is whether razors for more than $1,000 will work in the long run,” Dignan writes. “Bloomberg reported that Apple will adopt the iPhone X design when it launches its new lineup. For good measure, there is a new iPad Pro and Apple Watch on deck. The trio of iPhones — two with OLED screens and one LCD — revamps Apple’s smartphone lineup but largely eradicates the home button.”

“From a business model perspective, Apple’s iPhone strategy is interesting because it still goes premium. The razor-razor blade model is typically based on inexpensive razors,” Dignan writes. “Apple’s spin is to make money on the hardware, software and services. But the pivot to services is already underway. June quarter revenue for Apple services was $9.55 billion. In other words, Apple’s services unit — is going to be on a $40 billion annual run rate — real soon.”

Read more in the full article here.

MacDailyNews Take: As any iPhone X user can tell you, the eradication of the Home button can’t come soon enough. People, we among them, will line up in droves for Apple’s premium 6.5-inch flagship iPhone and Home button-free iPad Pros. We only hope that pre-ordering goes smoothly!


  1. Those are about the most expensive razors on the market! Apple has long used the very opposite model: using blades with non-standard connections sold at cost to keep people buy the expensive razors.

    Presently, though, they seem to be secure in the belief that the superior quality of their products will retain their customers and therefore they have begun selling ALL parts of the package with solid profit. Very far from Larry Dignan’s “analysis”.

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