When it comes to new products and services in the 21st century, Apple Inc. has a tendency to hit the target far more often than it misses. Run down the list of memorable products and you’ll see what I mean.
Since the turn of the century Apple has introduced many new Mac models. The Mac Pro seems like the loser in the bunch. iPhones? iPhone 5c was the loser. iPad? Only the original iPad seems like a problem child. AirPods, Watch, Apple Pay, Apple TV, and even HomePod have done well. What’s the key to Apple’s new strategy of growing Services?
Every technology gadget company and every services company have some product marketing techniques in common. One of them is more important than others yet often overlooked among members of the technorati elite politburo and the nattering nabobs of negativism which criticize anything and everything Apple does.
Differentiation is a key component to successful product marketing. Apple has always had Services but with a one billion customer base to service, the company is wise to push more products that integrate with the company’s hardware and software.
Hardware among premium brands of PCs, tablets, and smartphones remains much the same, so Apple uses software– iOS macOS, tvOS, watchOS et al– to differentiate the entire product line. So it is with Services. Apple has far more services with a revenue stream that filter into the customer base than Samsung or Google or Amazon, let alone the likes of HP, Dell, Motorola, Nokia, Huawei, and other knockoff makers.
Apple’s new strategy is to grow the Services revenue but to ensure that services– individually and as a collection– remain sufficiently different than competing platforms. That means Apple does not have to out Netflix Netflix for the new Apple TV+ and Apple TV Channels to succeed. This level of differentiation means more stickiness for the entire Apple ecosystem.
Apple Card is a good example. You get more cash back when you buy Apple products. I’m not so sure about the potential success of Apple Arcade because the company, and just as importantly, game app developers, makes a boatload of cash from being the most profitable game platform. Apple News+ fits, too. I ditched a number of news applications, including Flipboard, because so much content is available in the Apple News app. News+ simply adds to the differentiation.
What about putting more Apple Services on Android and Windows? After all, iTunes runs on Windows. Apple Music runs on Android. Could Apple get more Android customers to ante up with monthly payments to the growing list of Services products?
Just remember that differentiation is key, and Apple is a hardware company, too. Those one billion customers use almost 1.5-billion Apple products and a growing cadre of Services is a strong incentive for those on the dark side to cross into the light.