There are a hundred million active Macs and how many billion active iOS devices are there now? That is a tremendous user base for them to draw upon to sell those services.
The smartphone market in general is saturated in the "developed world". Most everyone is seeing contraction. Hence the shift to servicing (literally and figuratively) your existing customer base to generate income.
And of all the major smartphone manufacturers, Apple is the most well-placed to do so.
I won't argue that. In it's current form, Capitalism is all about "returning shareholder value" which means extracting as much cash as you can from customers.
But let us be honest - if the iPhone Xs had been released at $500 instead of $1000, would 100% of iPhone X customers have upgraded to the new model? Would 90%? 75%? 50%?
I am sure more would have then did, but I don't think it would have been a significant portion of the customer user-base because the biggest upgrade was the camera and the iPhone X's camera was already pretty decent.
Where their prices are really hurting Apple is India. Apple may have believed they could do in India what they did in China - sell expensive phones to the upper income tiers based on aspiration and/or vanity. And that has not worked as Apple just can't make a dent in the market, even with lower prices (that are still at the upper-end of the spectrum).
I think there is a large pent up demand for iPhone upgrades, but the costs are too high. I truly believe there would be considerably more sales if they brought prices back down to reasonable levels. Sure there is saturation of the market but that market still likes to upgrade their devices - perhaps not as regularly as before but there's still a strong desire for it.
I and those around me only provide anecdotal evidence but I really think it's pretty widespread. I'm a married middle class professional with no kids as of yet. We're Apple's core demographic yet we're holding onto our phones and MacBooks far longer than before. Not because we don't want to or can't afford to upgrade, but because the prices being asked have become outrageous.
I paid I think $600/$650 for my iPhone 6S and my wife paid less for her SE. To get the latest and greatest we now need to pay $1000 - that is an absolute huge jump and is price gouging. The XR which admittedly is a better device isn't all that different from my 6S yet costs around 1/3 more. We are not OK with that sort of pricing.
So instead we just bought a few more shares and kept our devices another couple of years.
I would happily buy an XS - but I will not pay more than $800 for one. The XR should be $600/$650.
Same for the MacBooks, they just go up and up in pricing under Cook. This is the same Apple of the 90's. Have a few hugely profitable years but the future raises a lot of questions.
You're right in that Apple has a huge user base, but my point still stands, that base can fairly quickly shrink if people stop going to Apple for new phones and Macs. Especially with their lack of focus on keeping Macs up to date with the latest silicon.
I'm not anti-Apple here. I do love their products and the XS is the best smartphone on the market. But their pricing and leadership is no longer OK with this customer. Also India was never a good market for Apple, it simply does not have a large and wealthy enough middle class to support large volumes of sales. India's GDP is less than the UK's with 1/20th the population. Plus they have some rather punitive and unfair import tariffs.
