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

[Juicy Box]

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.

I don't mind that Apple wants to increase their services.

But, I worry that their HW and SW might suffer from the result of shifting resources.

I already think that their SW quality has suffered over the past 5-6 years, I just worry that this trend will continue.

 

[ldandp0]

Chancing focus does not main abandoning the existing stuff. It become more future investments are put into something else.
Hardware can keep going on existing funding and skills. It is different than trying to expand.
Apple knows the hardware market is saturated. Like little over 10 years ago apple shifted its focus to the smart phone. They did not play in that market back then at all. They complete change it and now that market is saturated.
All companies must adapt and change to survive.
For example if Apple stayed focus only on desktop computer years ago they would of died before the laptop. They focused on the laptop or did not move on to smart phones they would of died a long time ago.

Another example is look at kodak. They used to be kings of the phone world. Where are they now? They failed to adapt and changed. They only focused on what they were good at it instead of changing with the times.

Kodak is actually a fitting example. The time to change was at least a decade ago. Changing now is much too late and should send huge red flags to any interested party. Focusing on services actually runs counter to their core identity as a company. They are about to self destruct, the only question is how soon it will happen.

 

[latweek]

The bland leading the blind.

 

[edwardelston]

I’d have to say I disagree, Apple today certainly isn’t perfect but they’re doing a lot of great things, ie: Apple Watch which is hands down the best in its class, the iPhone XS which whilst not the most exciting release due to the maturing smartphone market is still an incredible device and the new MacMini whilst heavily overdue is a great machine.

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.

 

[RogerWilco]

We are entering a Digital Dark Age, a period of human history where the masses have “access” to technologies that will ultimately control and enslave them. Google and Facebook understand this and have chosen to side with government interests as they methodically create a new feudal society based on interlocking service models. Apple is not yet a team player, perhaps the fate of the company will depend on them getting in line.

 

[DNichter]

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.

You're not wrong, the Mac is still important, but I keep getting this message that Apple hasn't updated their computers in years. They updated the MacBook Pro, MacBook Air, and mac Mini in 2018, and will be updating the Mac Pro and likely the iMac in 2019.

Yea, the video stuff is just a value add in my eyes, broadening their content package that they will eventually offer for a monthly fee (Music, TV, Apps, Magazines). I could even see them offering a monthly service for hardware. Healthcare is definitely a huge piece also and I am sure they want to play more in that space, but I imagine the regulations are insane and it will take a lot to pry money away from everyone else in health.

 

[Joniz]

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

I’ve found happiness, in coming to forums like this and engaging in debate & observation. (And wishful thinking.)

Besides, there’s not any other computer company I hold in higher regard than Apple.

Doesn’t mean I have to be pleased with their current direction, though. If I didn’t care about Apple, then I wouldn’t care if they f'ed up either.

 

[Frank Dalton]

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 sucks at services, so if this is "the future," they're screwed.

 

[_Refurbished_]

The more software Apple develops the better. People like to think that Apple is a hardware company, but it’s their software that has made them what they are today, blended with hardware innovation.

 

[Frank Dalton]

Chancing focus does not main abandoning the existing stuff.

Except that doing exactly this has *literally* been Apple's modus operandi in the Tim Cook era.
[doublepost=1550527203][/doublepost]

The more software Apple develops the better. People like to think that Apple is a hardware company, but it’s their software that has made them what they are today, blended with hardware innovation.

Frankly, they need to develop *less* software. Their current hit-and-run software development model is not very productive. It is painfully obvious that they form sporadic teams to develop a particular application and then disband the entire team to move on to the next shiny thing, leaving whatever it was they worked on to languish in a half-baked, 1.0 state for years.

 

[jpn]

the MacRumors article's title, and, in the end, its conclusion is wrong.

there is no future for "computing" at an individual level. that was clear in the early 2000's. duh.

there is a future in establishing a marketing strategy based on how powerful your device is, in various screen sizes and equipped with the best user input for that device's dimensions.
if this is not the case, then apple's decision to invest in 100's of billions of dollars its chip engineering development capability was in fact rather a short term strategy.

apple has not even scratched the surface of the microsoft behemoth's hold on corporate infrastructure.

the only thing the article gets almost right, but doesnt even understand, is that apple doesn't want to only be a force in providing services, it has clearly made a decision to be a content aggregator and content creator. that part has only been developed during the past two years.
if you want to describe content creation as a service, go ahead, but it is a different business model than what would be called a "services" model.
these past two years of apple content creation attempts have failed.
measure how far amazon is on this front.

bringing into this mix any mention of Ahrendts is bizarre. and tries to add some kind of proof to its conclusions.
she was fired because she was costing the company too much money for her value and the value of her ideas, at a time when apple's retail sales have fallen due to a delusional pricing strategy that failed. the stores are overcrowded messes. there is not a lack of customers.

 

[Vjosullivan]

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[BuddyTronic]

there is no Apple "services" without the iPhone

Apple TV, iPad, HomePod, Mac too!

 

[pat500000]

A sign of desperation. Service? Haha. Reliant on one thing is a failure. Go back to macs and software improvement.

 

[halluxsinister]

That’s lovely and all, BUT... who is going to use Apple “services” if they’re not using Apple DEVICES? Do you know how many people who have never owned a Mac, an iPhone, iPad, iPod, or an Apple TV, etc., are using iTunes or iCloud? Of people who have computers but run them with either GNU/Linux, some BSD variant or other Unix, or Windows, or Android phones, how many use Apple services?

I would be willing to bet it’s somewhere around the low end of ZERO.

The whole point of a Mac is it runs iMacOS-x, and the whole point of macOsX is that it runs on a Mac. Same for iOS and iDevices. And that goes double for Apple’s various software packages and services. Apple better remember at some point theyre a COMPUTER company. Fashion and lifestyle will only go so far.

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

 

[44267547]

As much Apple does make quality hardware, that’s just the understatement, their software and ecosystem is what derives the consumer to stay loyal to Apple . The problem that Apple is facing, is that their prices are starting to drive the consumer away from their ecosystem and/or, the consumer is not upgrading from an older device to a new device, because it’s not affordable/attractive. Hardware is equally just as good among the competitors, Apples focus should retain its software legacy that they have always had, and that’s what makes Apple special, among other things.

 

[EdT]

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.

Personally I never did replace any phone I had after only one year of use, except my first Android. I had a 4s for a few years, bought a 6 plus when it came out, and because of screen problems last summer ended up buying a new iPhone in 2018.

As far as hardware goes, I don't know how they could do it but a modular phone that could be upgraded would keep my interest, especially if it meant that features I wanted I could include, and features I didn't I could take a pass on. Unless I found out later I did want it, and could upgrade that component.

Like I said, that sounds easy but it would probably be cost prohibitive or not really practicable. Computers tried to do that in the mid 1990's with the promise of updating processors as new ones came out. I don't think any of those 'upgradeable' computers lasted more than one processor cycle.

If you are really eco-friendly then you should make products that last for years. I wouldn't mind seeing Apple do that with phones. As far as services go, offer something I want at a price I don't think is too high, and I'll buy in. Don't and I won't. I don't buy anyones service or product just because of a name. I may give a company the benefit of the doubt, if things are equal or nearly so as far as products or services, but I won't mind switching if another product or service fits my needs better or does an equal job at a better price. But I will consider how and why they are cheaper as well.

 

[jeremiah256]

You're not wrong, the Mac is still important, but I keep getting this message that Apple hasn't updated their computers in years. They updated the MacBook Pro, MacBook Air, and mac Mini in 2018, and will be updating the Mac Pro and likely the iMac in 2019.

Yea, the video stuff is just a value add in my eyes, broadening their content package that they will eventually offer for a monthly fee (Music, TV, Apps, Magazines). I could even see them offering a monthly service for hardware. Healthcare is definitely a huge piece also and I am sure they want to play more in that space, but I imagine the regulations are insane and it will take a lot to pry money away from everyone else in health.

It's the update cycle that is the perceived problem with the Mac Mini, iMac, and Mac Pro. And to be honest, I don't think it will get any better. Whether people like it or not, mobile and portable, augmented by cloud computing, is the future and the lifeblood of not just Apple, but every computer manufacturer. Desktop computers will always have a niche, but it's not worth it for Apple to invest too much time or energy in that form factor.

 

[Karma*Police]

I've no problem with Apple focusing on services. The problem is, they're simply reacting to an accidental outcome of the success of their hardware business and moving to where the money is.

Eddy Cue (and Tim Cook) is once again skating to where the puck was several years ago. Apple could have been the de facto leader in video, music, home automation, voice, cloud services, and digital payments, but they were either too late to evolve/introduce the service or screwed up the execution at some level.

While their services business has been growing, it too, will plateau along with their hardware business unless they make some really radical moves, like replacing Eddy with a creative/visionary leader and adopting an Apple services everywhere strategy.

 

[McG2k1]

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.

What do you consider to be services?

 

[0388631]

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

Probably not for a long time. You pose an interesting question, though. If the current outlook on mobile phone sales don't improve, companies won't let their products languish. I can see Apple coming out with faster A~ processors and QC doing their own with Snapdragon. With the wild rumors of Google working on a new OS to replace Android, it wouldn't seem unlikely that Apple is probably working on an iOS successor that can take on more ability due to even more complex and faster SoC.

Services, OTOH, allow a reliable income stream even if it's no phone sale. If Apple made an all in one subscription for $60 a month, which gave you access to bigger cloud storage, Apple Music, TV, etc. I'm sure they'll get a lot of bites.
[doublepost=1550534109][/doublepost]These guys get it. Though I'll admit, $80 sounds more realistic than my proposed $60.

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

[doublepost=1550534257][/doublepost]

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.

It'll be even slower if they don't let go of the "family friendly" charade.

 

[Macaholic868]

Good to see that Apple recognizes that AI and service are the future. We’ve hit peak smartphone in terms of hardware and cost. I think from here on out we’re looking at a mostly 3 to 4 year upgrade cycle for the average iPhone owner. Especially those of us paying close to or over a grand for their phone. I can justify paying $250.00 - $333.33 per year for my primary computing device but $500 to $1,000 is pushing it.

In addition there is nothing that I can think of from a hardware perspective that Apple could add over the course of the next several years that would compel me to upgrade from the iPhone X. Not even 5G. I find LTE to be plenty fast for anything I do on my phone and I’m not a photography or video aficionado so the camera already has more features than I’ll ever use. In the age of streaming 256 GB of storage is more than I’ll ever need.

 

[DNichter]

It's the update cycle that is the perceived problem with the Mac Mini, iMac, and Mac Pro. And to be honest, I don't think it will get any better. Whether people like it or not, mobile and portable, augmented by cloud computing, is the future and the lifeblood of not just Apple, but every computer manufacturer. Desktop computers will always have a niche, but it's not worth it for Apple to invest too much time or energy in that form factor.

That’s fair, it should be updated more frequently. I don’t think the gains from year to year from a processor standpoint have been all that impressive either way, but they need to allow for people to buy the newest available processor. Taking a more modular approach to design would be better. You’re exactly right though, Apple needs to prioritize their time and money and unfortunately for small group of people, the Mac form factor is likely the last on that list of priorities.

 

[dumastudetto]

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

Mac is the past. The future of Mac is iPad Pro.

 

[Frank Dalton]

Mac is the past. The future of Mac is iPad Pro.

Then the future of Mac is switching to a different operating system. The iPad "Pro" is not a professional machine.