Apple's Recent Leadership Changes Suggest Transition From iPhone Reliance to Focus on Services

[MacRumors]

A new report out today by The Wall Street Journal takes a look at the recent shake ups to Apple leadership, and how the changes could be an indicator that the company is transitioning from relying on iPhone sales to prioritizing its services business and other divisions.

Newly appointed executive John Giannandrea also heads Siri development​

Specifically, the report claims that recent hires, departures, promotions, and restructurings have led to several projects being put on hold while the new managers reassess priorities. This has left many existing Apple employees "rattled" as they have become unaccustomed to such frequent changes in leadership prior to the shake up at the company.

The primary reasons for the shifts vary by division. But collectively, they reflect Apple's efforts to transition from an iPhone-driven company into one where growth flows from services and potentially transformative technologies.

These changes include the promotion of John Giannandrea to senior vice president, from a machine learning and AI role. After his promotion, Giannandrea decided to move Bill Stasior, head of Siri, to a lower role at the company. In terms of high-profile departures, retail chief Angela Ahrendts recently left Apple after spending five years with the company. These three major changes happened within the past two-and-a-half months.

Along with the staffing updates, Apple has trimmed around 200 employees from its autonomous vehicle project, and continues to redirect much of its engineering resources into its streaming TV service ahead of the planned 2019 launch.

"This is a sign the company is trying to get the formula right for the next decade," said Gene Munster, a longtime Apple analyst and managing partner at venture-capital firm Loup Ventures. "Technology is evolving, and they need to continue to tweak their structure to be sure they're on the right curve."

Now, Apple is focusing on building its services catalog and enhancing artificial intelligence features, which should in turn encourage more hardware sales. Replacing Stasior as the head of Siri, Giannandrea is said to be "looking to improve Siri's accuracy and performance."

iPhone sales dipped over the 2018 holiday season, leading to many reports about Apple's new plans to combat stagnating smartphone sales. The company is said to have cut back on new hires, and in January Apple lowered its revenue guidance for the first quarter of the 2019 fiscal year by up to $9 billion due to fewer iPhone upgrades than it anticipated.

At the same time, Apple's services business hit an all-time high in Q1 2019, up 19 percent year-on-year. During the first fiscal quarter of 2019, Apple's services business brought in $10.9 billion in revenue, including platforms like iTunes, the App Store, the Mac App Store, Apple Music, Apple Pay, and AppleCare. Thanks to their success in the wake of flagging iPhone sales, these services are expected to be a growing focus for the company over the next few years.

Article Link: Apple's Recent Leadership Changes Suggest Transition From iPhone Reliance to Focus on Services

 

[Baymowe335]

Every investor already knows this and has known this for some time.

 

[G5isAlive]

No joke. Someone at the Wall Street journal got paid for this? In other news, tomorrow is a new day.

 

[neuropsychguy]

I know a lot of commenters here will bemoan this but Apple will not survive if they do not increase their services. They will still be heavily involved in hardware but services are the growing future of the tech industry.

 

[keysofanxiety]

Every investor already knows this and has known this for some time.

And what about humble readers who don't have shares in Apple? Are we not allowed to learn of this?

 

[Acidsplat]

The iPhone bubble was going to burst eventually; phones have reached the point that year over year improvements aren’t enough for people to upgrade. Consumers’ current phones are just good enough.

With the news of shifting away from relying on iPhone sales and the rumors of a redesigned MacBook Pro in the works and the Mac Pro coming, I hope they get back to their roots and become way more well rounded with their products like they used to be.

 

[Pepe4life]

How about focusing on hardware? The entire Mac line is a joke at this point.

 

[snowboarder]

there is no Apple "services" without the iPhone

 

[KPandian1]

We here at the MacRumors forum knew this shift already; just curious how far Apple is going to go!

I wonder how expensive these "services" are going to be, when lumped in as a monthly cost.

How stable is that income going to be for Apple?

Easy to quit services.

It is tough to quit hardware, as usually one is married to it; at the least it is a three year engagement.

 

[tevion5]

Could they focus on pricing Macs and iPhones at levels that don't push even die-hard Apple zealots like me to near breaking point.

 

[Glideslope]

So the guy overseeing Siri Development is promoted to Senior Vice President for Machine Learning and AI? Yup, Tim needs to go.

 

[boast]

I know a lot of commenters here will bemoan this but Apple will not survive if they do not increase their services. They will still be heavily involved in hardware but services are the growing future of the tech industry.

Survive what? The need for exponential growth in revenue?

 

[BvizioN]

Does that mean that on a very near future, new iPhones will be just as frequent as the Mac Pro or Mac Mini?

 

[___joshuaturner]

I STRONGLY DISAGREE WITH THIS DECISION.

 

[newyorksole]

iPhone Upgrade Program
Monthly AppleCare
iCloud Storage
App Store
Apple Music

Monthly subscriptions are where it’s at.

 

[MacLoveMacHate]

Oh, now they care about Siri? Whether or not I'd use the HomePod much, I resisted buying as Siri has bottom-of-the-pile capabilities and can't natively play anything other than Apple Music. Otherwise, it's a tempting piece of hardware.

 

[Timemaster]

Basic fact is everyone else figured out a while ago SAS is where it is at. Apple is still really far behind the 8ball on it though as they need to decouple the fact that you have to be on an Apple hardware product to get apple services.

Take for example Google Music. You do not need to be on a google device to use it. It works great on iPhone, any computer and multiple speakers. They just have to be willing to tie into Google API for home, they need to create an Apple for Android.
This follow by for iTunes movies they really need to be able to play on something like a roku, and on Android phones instead of being limited to Apple owned devices.

Reason being is Apple is not the only game in town and they are late to the table. In this they have to overcome the current players and understand that not only does your product have to be better but have to be better enough to be worth the cost to switch.

 

[nvmls]

there is no Apple "services" without the iPhone

There is no iPhone without Mac

 

[az431]

I know a lot of commenters here will bemoan this but Apple will not survive if they do not increase their services. They will still be heavily involved in hardware but services are the growing future of the tech industry.

Apple has never demonstrated much competency in delivering services, so if Apple does not survive, it will because they shifted their focus to something they suck at.

 

[mi7chy]

What they don't realize is the service industry doesn't work if they force people to buy their hardware. It needs to be cross-platform to work like Amazon, Google, Netflix, Spotify, etc. so pretty much all non-Apple services.

 

[AppleFan91]

Very late to the game, but hopefully they can use all that money to speed up the process. Honestly, a lot of their services are poo.
[doublepost=1550510696][/doublepost]

What they don't realize is the service industry doesn't work if they force people to buy their hardware. It needs to be cross-platform to work like Amazon, Google, Netflix, Spotify, etc. so pretty much all non-Apple services.

This x406.8%. Probably their most successful service is Apple Music which is...wait for it...on multiple platforms.

 

[cardfan]

Google was primarily the reason behind apple’s service growth. Applecare is second. These video rumors will hardly make a dent. It’ll be slow going even if it does somehow grow. Costs for original content makes it unlikely Apple will ever profit from it.

I’m all for services growth. But I can’t see apple getting a sub out of me for their video thing. They’ll need to be more innovative than this to grow services.

 

[AppleFan91]

iPhone Upgrade Program
Monthly AppleCare
iCloud Storage
App Store
Apple Music

Monthly subscriptions are where it’s at.

Im about to have an Apple Payment to go with my cell bill, car payment, mortgage, etc. haha

$80 a month for all-Apple access

 

[snowboarder]

...because they shifted their focus to something they suck at.

The problem today is that Apple sucks at pretty much everything.
There is no single product without any issues. All they do is denying everything.

 

[camomac]

Honestly, most of the content that I've seen Apple investing in for their video streaming has seemed very boring and not very interesting to me. I hope they change the. Apple Music has been lackluster at best. I hope they can pull it together.