We need to go over the era of fake news. Yes, the interwebs have gone from the information superhighway era to the misinformation era, but there is nothing wrong with taking a stand for facts, truth, justice, and the Appian Way!
OK, I made that up, but you get the idea, right? It’s one thing to “call it as I see it” but it’s something else again to “call it like it is.” Let’s call it like it is. Apple is not all about Services now.
Look, it’s easy. Smartphones have hit something of a plateau in recent years; iPhone included. Apple double compensated for the lack of growth with upgrade plans, trade-ins, higher prices on new models (which results in larger gross margins, so more profits per unit), and focus on other revenue and profit markets– Apple Watch and AirPods are an example.
Regarding Apple’s iPhone, stock price, financial performance, and the future, Zachary Karabell took a road less traveled and decided to jump on both sides of the fence (ouch):
Apple was crowned the first company to be valued at more than $1 trillion. Now, in the wake of a surprise profit warning, its entire future is being questioned. Both reactions are extreme. A victory lap wasn’t warranted last summer, nor is a eulogy now.
Alright, somebody– finally– is calling it as it is.
Apple knows that it is at peak hardware and that simply selling more devices is not a viable path forward, however lucrative it has been until now.
Well, that didn’t last long.
Of course, those who sell more devices than Apple and have to discount prices and live on razor thin to no margins at all are seldom discussed when looking at Apple’s past, present, and future performance, but you get the idea. Prognosticators think Apple’s hardware days are over and the future looks bright with Services.
Look what it did for Microsoft, Amazon, Adobe, and, well, maybe somebody else.
What should Apple do?
Sell fewer iPhones and assorted devices such as Macs and iWatches at a higher price than mass-market rivals, and then flood those millions of users—who have higher than average disposable income because they were able to afford those devices in the first place—with apps and content that they will pay for.
Comparisons to IBM or HP, and especially to BlackBerry or Nokia, are not appropriate because Apple is Apple. One of those five companies is not the same. Actually, IBM and HP are closer to the same, BlackBerry and Nokia are closer to the same, but Apple is the odd man out.
Let’s move toward the other side of the fence.
Apple’s specific challenge is how to transition to a business less about selling stuff than providing services to people who buy your stuff
There it is. See it? Apple needs to be a little less about selling hardware and a little more about services those hardware customers buy.
The company is still projected to generate more than $250 billion in revenue in 2019; it will still be one of the largest and most profitable companies in the world
Yep, call it like it is, not like your anti-Apple narrative wants it to be.
Apple remains what Apple is all about. iPhone, iPad, Mac, Watch, AirPods, Apple TV, HomePod, Beats headphones, accessories– all hardware. Oh, and Services; that is, services— software, music, books, service and support, media, and so on– all which can prosper but only if Apple has a billion hardware customers.
Yet, Apple is more than a hardware company. Software and Services are important components to the mix of success.
Daniel Eran Dilger ripped into the mania and comparisons of Apple to Microsoft, Google, Facebook, and others who do not bask in the same kind of ecosystem. It’s almost a year old but a worthy read. Apple is a hardware company that has added Services to the mix.
Can you name a services company that has added hardware to their mix that also matches Apple’s performance?