Apple is rolling in the dough. Every product makes more money than any competitor. Yet, what is Apple’s fastest growing product? Well, it’s really a collection of products called Services, not with revenue and profits higher than iPad and Mac combined. What else?
Slowly and steadily Apple has grown the Services group of products into a huge moneymaker. App Store apps, iTunes, Apple Pay, Apple Care, Apple Music, and other items help the cash register stay full.
The rage among software publishers these days is subscriptions. Likely you’ve seen them in the App Store already. Get a free app, try it out, and if you like it, pay the monthly fee (sometimes a discount for an annual fee). Microsoft does it with Office 365. Adobe does it with Photoshop and Lightroom, plus the entire suite of Creative Cloud apps. One monthly fee.
Apple Music works the same way. Pay a monthly fee, listen to any of the 40-million songs Apple has stored up and ready for download. Apple takes a smaller chunk of App Store fees for subscriptions but does not have subscription fees of its own.
Apple Care is a one time fee, usually for a year or two, to provide an extra warranty for hardware. The iPhone Upgrade Program gets customers a new iPhone every year for a low monthly fee (including Apple Care), but that and iCloud is about as close to a true blue subscription as Apple goes.
Where could Apple apply the subscription model? Three areas.
First, professional applications. Apple says there are about 2-million Final Cut Pro users. Instead of paying $200 every three years or so for a new version, how about a monthly fee of $10? Ditto for Logic Pro X, the professional audio recording application.
Second, App Store subscriptions. Apple could charge a monthly fee for a specific group of applications from the App Stores, macOS or iOS. Setapp does it. More than 100 applications for a monthly fee of $10.
Finally, hardware subscriptions. iPhone Upgrade Program is more of a rent-to-own program. You pay more than full price, sans interest, but with Apple Care tossed into the mix. How about a subscription– or, if you prefer, a rental fee for Apple Watch, specific Mac and iPad models?
Subscription fees are all the rage these days and both App Stores have more than ever. Apple could do it, too– software and hardware. For now, that’s revenue and profits that Apple leaves on the table.