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

[DreamsOfAppleBiz]

Do you know what services would be exciting? A competitor to Google Business suite (gmail, docs, etc). Does anyone really want to keep giving their data to Google?

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.
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.
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

 

[johnnygee]

Eventually, smartphones will be a commodity. The same thing happened with the Walkman when Akio Morita was chairman of Sony. It only makes sense for Apple to branch out.

 

[MacLawyer]

This makes sense. My only criticism of Mr. Cook is that Apple was turning into a (mostly) mobile handset manufacturer. Diversity of the income stream is essential.

 

[Cosmosent]

...

 

[I7guy]

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.

Apple has already started to decouple Apple Music. I don't know how far they will go though. Facetime, imessage? Part of their core strength is the ecosystem integration. Apple should/will think long and hard and if it will ultimately be better or worse for the company.

 

[Napalm Doctor]

Nothing new...

 

[Falhófnir]

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.

Most of their services are still tied into iPhone ownership (to a much lesser degree iPad and mac ownership as those are much smaller) - this is what they somehow need to address to break their achilles heel of reliance on iPhones.

 

[msama]

Apple exec 1: Let's focus on services now
Apple exec 2: Since our services only run on our hardware, we're still going to focus heavily on that as well, correct?
Apple exec 1: Let's focus on services now

 

[PSCConMP]

Sears was born as a mail order company. One morning someone at Sears woke up and said "We don't need that mail order business". Sears is now paying the price for that decision. Apple was born as a computer (Mac) company. One morning someone at Apple woke up and said "we don't need Macs". I fear Apple too will pay the price for that decision.

 

[nexusrule]

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

Totally uninformed comment. Try to know what you are talking about before writing, it will improve your public perception and maybe what you say will be taken seriously.

 

[123]

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.

I'd argue it is the exact opposite. Once you are completely into cloud services for everything it is nearly impossible to migrate to something else. The lock-in effect is just so much higher because services can take on so many different forms and ways to interact with your life that you will never be able to find a 1:1 replacement.

Just look at a phone for example. In terms of hardware, iPhones are nearly identical to numerous Android devices. But the OS makes all the difference. And then there's all your data on iCloud, probably synchronized to your Macs. Maybe you also use Numbers and Keynote, Sketch and other Mac software... I can guarantee you, picking up a new phone and a PC will be the easiest task when migrating to a different platform.
[doublepost=1550518745][/doublepost]

Im teetering whether to replace my 2013 MBP with another MBP or a Windows machine. This decision will entirely dictate what my next phone will be.

Out of curiosity, I absolutely understand that on a Mac you would be stupid not to use an iPhone as you would lose out on all the benefits of tight integration. But on Windows, since Windows phone is dead, is Android (an alien platform) so much better to use than an iOS device (also an alien platform)?

 

[nt5672]

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.

Apple's focus on political correctness does not work for services. At one time Apple's hardware was so good that people looked the other way, but Apple's arrogance does not work for services, especially services that only run on mediocre Apple devices.

 

[Joniz]

And?

As with other companies, Apple engages in a ton of R&D. Some things may see the light of day. Many don't. Or may come to fruition later in time, in a different use or form. That's the way R&D works. Of course it is paid for by product and services revenue.

The same as other companies.

And it’s just irritating that Apple has entered a malaise, seemingly wandering from self-driving cars to Hollywood production company to news publisher to smart speaker producer and pushing the cost of this lack of focus onto the customer.

Think if Apple had priced the iPhones and iPad Pros and Macs reasonably. Think they would’ve had such a terrible time selling the things?

But they can’t as long as they have all this non-revenue producing overhead.

They’ve lost focus. Other companies lose their focus too. Doesn’t mean it’s the right thing to do.

Sorry. I’m just fed up with Apple Under Spindler…sorry, Cook.

 

[KPandian1]

I'd argue it is the exact opposite.

I can guarantee you, picking up a new phone and a PC will be the easiest task when migrating to a different platform.

I was referring to iTunes and the upcoming TV services - on top of the existing services.

iCloud - everyone backs up somewhere; this is most convenient for the Apple world. There are other options.

Married (or engaged) to Apple hardware - it means this; once you buy a $999 or $1599 iPhone, and/or a $5000 Mac, you are stuck with it for a minimum of three years usually. Yes, while one can abandon the platform one day after buying the device, usually people live in it to justify the purchase, even the great experience.

So, while picking up a $300 laptop and a zero dollars (with cellular plan) is simple, the Apple buyer will be very reluctant to move on.

 

[russofris]

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

Indeed, It is strange to focus on the Mac Appstore when the lackluster Mac lineup has everyone in a state of perpetually waiting for the next Mac. Couple that with Apple's disinterest in fixing each revision's defects, stagnation, etc and it becomes a no-win scenario.

I think Morty summarizes my opinion on the Mac situation the best with the following quote:

 

[69Mustang]

That is my point. Anyway, as others in the linked thread indicated it is a behaviour that brings a smile, head shake and the term weird.

I gotta tell ya. Your evidence doesn't support your assertion. Nothing in that thread comes close to being evidence of Apple censoring media. That thread does suggest that Fox has two separate audio files for the movie, and one of those files a single word censored. Based on the playback format, you may or may not get that censored word. What it doesn't suggest is Apple is censoring dialogue. Especially not a single word when all the other language is unaltered.

Apple may lean towards PG content, but you can't use what's in that thread as evidence that they would. It's simply not there.

 

[MVMNT]

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

I think most people who keep up to date with Apple do too!

 

[69Mustang]

I was referring to iTunes and the upcoming TV services - on top of the existing services.

You're right. Services, specifically the entertainment services, don't have the stickiness that hardware does. A lot of people sub to binge watch something (service exclusives for example) and cancel →wash-rinse-repeat. A lot of the same content can be had in multiple places. Apple will most likely find running a video streaming service particularly brutal from a cost perspective. Content ain't cheap to create or buy. There's also no guarantee the public will like the content. Their efforts thus far are not confidence inspiring to say the least.

 

[KPandian1]

Apple may lean towards PG content, but you can't use what's in that thread as evidence that they would. It's simply not there.

Huh?!

Every airline that plays a movie has such a copy - the sanitized dialogue and video version. They have done so for decades.

Not a stretch for a giant like Apple. It is bigger than those sky taxies, and is focused on such media, not flying buses around the world..

 

[citysnaps]

And it’s just irritating that Apple has entered a malaise, seemingly wandering from self-driving cars to Hollywood production company to news publisher to smart speaker producer and pushing the cost of this lack of focus onto the customer.

Think if Apple had priced the iPhones and iPad Pros and Macs reasonably. Think they would’ve had such a terrible time selling the things?

But they can’t as long as they have all this non-revenue producing overhead.

They’ve lost focus. Other companies lose their focus too. Doesn’t mean it’s the right thing to do.

Sorry. I’m just fed up with Apple Under Spindler…sorry, Cook.

Time to find happiness and move on to another supplier that you hold in higher regard?

 

[BlandUsername]

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.

This whole streaming media fascination still leaves me wondering WTH are these idiots thinking? There is only so much content to begin with, and anyone with cheap Cellular/cheap home internet knows. you are better off buying and DL'ing the content to keep forever and load onto your devices. Even the Apple content being sold should be kept local, backed up and uploaded to your device.

 

[cardfan]

They could, but focusing on Mac hardware isn't going to help them increase revenue. The bulk of their customers come to Apple for mobile products and wearables. They need to prioritize these customers, and these customers are investing more in services.

Of course not. But macs remain the heart or foundation of Apple. Everything depends on iPhone that depends on Mac. It all goes back to Mac. Not the greatest profit center but still vital.

That said I think cook gave a hint already. This video stuff is just crumbs. More pulling at strings. A way to get people focused on the obvious. The real growth is what he said. Medical. Forget the meager budget for the living room and cutting the cord to get a piece of. I’d rather have a piece of that obscene healthcare spending.

If you wanted something like a carrier to help subsidize and turn the magic money machine back on for apple, its insurance companies.

 

[ldandp0]

A shift from what they've done great to what they've been horrendous at. Good luck.

 

[69Mustang]

Huh?!

Every airline that plays a movie has such a copy - the sanitized dialogue and video version. They have done so for decades.

Not a stretch for a giant like Apple. It is bigger than those sky taxies, and is focused on such media, not flying buses around the world..

You sort of overlooked the context of my quote and the related discourse. I wasn't claiming Apple wouldn't censor a content. I said there's no evidence in the original thread that supports Apple did censor that content as the poster claimed. There isn't.

 

[farmboy]

What concerns me, as a very long time Mac user and fan, is that these "services" are either ill-conceived or poorly executed--numerous examples of each, or they simply languish into a black hole as Apple gets attracted to the next shiny new bauble..."Apple buys Barbie doll pull-string technology".