Apple's Services Category Set to Be the Company's Main Revenue Driver Over the Next Five Years

[Michael Goff]

If I put more trust on the testimonials of professionals who create world class digital/physical products over cherry picking a statistic from an article as a metric of product satisfaction? Yes I do.


If I'd compare the iPad Pro to a competitor device I'd pick the latest Surface Pro, not the LG Gram. And in terms of power, the iPad is getting kicked in the shin as a workstation replacement. (I insist on the word workstation because that's what apple promises)


And speaking of promises, if that's what Apple PROMISED with the HomePod, then talk about a lame duck of a product indeed. That walled garden has become a miserable quarantine.

How is it cherry picking a statistic? Do you have any sources that disagree with the idea of it being the best heart rate sensor on a smart watch? Do you have any real sources with any real data to back up anything you’ve claimed?


I’d actually like to see this promise of a workstation from Apple. I’d say that it isn’t a case of trusting your word, but it kind of is.


Now we get to the third thing, the idea that the Walled Garden is a miserable quarantine. How? Apple Music just works. iMessage just works for me. I’m not miserable. And the fact that you did little research and can’t see the value in a product that fits perfectly into the Apple ecosystem is on you.

It does because everything good they do is harder to access through the phone when the UI is glitching out and lagging down to 10% speed.

That’s quite the bit of hyperbole there.
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Oh, why bring up Federico Viticci? That guy went way, way out of his way to do everything on an iPad. What would take him 1 step and a few minutes on a Mac took him like 10 steps and a half hour on an iPad. Lol. He’s admitted this and does it anyway. Not smart!
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BUT DID get him invites to Apple events.

I brought up a guy who is able to do all his work on an iPad, something I’m told is impossible to do.

Or, you know, we want to see Apple get better again so that we can at least justify our ecosystem lockdown.

-written from my iPhone.

Telling Apple they always do everything wrong won't make them better, it will just make everyone ignore you.

 

[Chupa Chupa]

iPhones eventually will plateau. Even the iPhone X led to lackluster sales and I see more 7+, and even 6s plus still out there being used. Yet all of those phones have Apple Music, etc which are services people gladly pay for.

Some, yes, but enough to catapult to over 50% of Apple revenue? That's a tall tree to climb unless something fundamentally changes at Apple. It would mean Apple isn't going to rely on its hardware to sell services. Apple Music, etc. will be open to all OSes. There simply are not enough iPhone users in the world... or growth (iPhone rule the U.S., but Android is dominant in the rest of the world) to get Apple services to be more than Apple hardware unless hardware takes a sudden dive (doubtful) or Apple opens it up. And the threat to us Apple users is Apple won't depend on hardware buyers nearly as much as keeping subscribers on board. In reality hardware will become second fiddle and eventually get "iPod-ized" out of the revenue picture. Not sure if that's believable but can't say it doesn't look like that is how Apple is setting up with recent connected h/w.

 

[Falhófnir]

This is not surprising. At one point, Cook was fairly transparent about generating consistent (albeit smaller) revenue growth for Apple instead of relying on the occasional “blockbuster” product.

The iPad, for instance, was a revolutionary product and is still the category leader. Yet, iPad revenue declined for years and has only stabilized due to higher ASP of the Pro line.

Say what you want about the hardware coming out of Cook’s Apple, but he’s always been looking to the services for future growth: Apple Pay, Apple Music, healthcare, etc.

I'm expecting that's also where the March 27th event will come into it - if they're building and education platform that will be yet another revenue stream to add to the list, and in that case probably both hardware and software (though likely less so hardware as I expect it will be sold at lower margins)

 

[Neodym]

[Apple’s] software especially isn't as stable, intuitive refined and as current as it should be.

... and as it used to be in days gone by.

 

[9081094]

Not everyone! I’m reading and can’t agree more

Telling Apple they always do everything wrong won't make them better, it will just make everyone ignore you.

 

[Chupa Chupa]

The constant trashing helps some people to feel good about themselves giving them a sense of power, filling deep voids in their lives. For a minute or so, anyway.

Very true. But, in honesty, it goes both ways. A lot of posters here get too tribal on whatever system, company, they are promoting or defending. I wish it was a straightforward tech discussion but too often people act as if the opposing voice is the dark side of the force. And then are are some true trolls in here that are just bored.

 

[Michael Goff]

Not everyone! I’m reading and can’t agree more

Everyone who can look past their own biases.
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Very true. But, in honesty, it goes both ways. A lot of posters here get too tribal on whatever system, company, they are promoting. I wish it was a straightforward tech discussion but too often people act as if the opposing voice is the dark side of the force. And then are are some true trolls in here that are just bored.

Yeah, I wish this place was easier to get some real discussions going on. But some people have the idea that a company either does everything right or everything wrong with no middle ground. And that’s not how reality works.

 

[fairuz]

That’s quite the bit of hyperbole there.

No, that's exactly what my experience has been the entire time I've used it. Takes literally 10 times as long to open Musc or Safari or type anything (keyboard lags). UI has all sorts of new glitches like the bottom bar in Music spazzing when I try to bring it up to shuffle (which btw is a stupid interface to begin with). Yes, I tried wiping/restoring my phone. Yes, other people have the same problems.

So yeah, now I'm thinking about Android for the first time in my life. And believe me, I hate Android.

 

[JGIGS]

I’m not even saying to not be critical. I can easily name a ton of problems I have with current generation products, not to mention some of the things that are barely current generation. But to have nothing good to say is beyond laughable and that’s my problem.

A bad software release doesn’t negate all of the good things they’re doing.

I never said Apple had nothing to criticize. I just said they were doing some things right, and really well, something you seem incapable of being able to admit. Anything Apple does right seems to be meaningless to you because your pet problems haven’t been fixed. Get some perspective.

I know it wasn't directed at my quote but I praise Apple when they do things I like. Since I rated my music on itunes for years I love that apple music kept my star ratings and still allows me to use them and create smart playlists (though I wish I could share smart playlist with people) which no other provider to my knowledge has. New music playlist every week have been great as well. I'm one of the few that actually praise and like AM.

Hardware and process speeds top notch!

Software and wall garden ecosystem needs drastic improvement.

That's my view of Apple in a nutshell.

Don't make me choose Apple products because of a closed ecosystem. Make me choose it because it's simply better.

 

[Michael Goff]

No, that's exactly what my experience has been the entire time I've used it. Takes literally 10 times as long to open Musc or Safari or type anything (keyboard lags). UI has all sorts of new glitches like the bottom bar in Music spazzing when I try to bring it up to shuffle (which btw is a stupid interface to begin with). Yes, I tried wiping/restoring my phone. Yes, other people have the same problems.


So yeah, now I'm thinking about Android for the first time in my life. And believe me, I hate Android.

I think you should try an Android device, just to see how the phones work. But I would recommend a Chromebook instead of an Android tablet.

I know it was directed at my quote but I praise Apple when they do things I like. Since I rated my music on itunes for years I love that apple music kept my star ratings and still allows me to use them and create smart playlists (though I wish I could share smart playlist with people) which no other provider to my knowledge has. New music playlist every week have been great as well. I'm one of the few that actually praise and like AM.


Hardware and process speeds top notch!


Software and wall garden ecosystem needs drastic improvement.


That's my view of Apple in a nutshell.


Don't make me choose Apple products because of a closed ecosystem. Make me choose it because it's simply better.

Mea Culpa for making it seem as though I was criticizing you personally. I’m just getting frustrated at MacRumors in general. There seems to be this undercurrent of hatred these days, and that is directed at Apple for sleights real and imagined.

 

[The-Real-Deal82]

A mature market with annual upgrades dropping off means Apple have to evolve and focus on where the revenue streams are. Everyone has a smartphone these days and this means the need to upgrade annually has disappeared.

 

[fairuz]

Maybe the Mac Mini and Mac Pro will just be a cloud service.

If by "cloud" you mean "vapor" and by "vapor" you mean "vaporware."
Oh well, actually it's good the Mac Pro isn't being released before Intel's fixed their chip problems.

 

[citysnaps]

Or, you know, we want to see Apple get better again so that we can at least justify our ecosystem lockdown.

-written from my iPhone.

And how's that been working for you? You know, over the years?

So you're beholden to Apple's "locked down" ecosystem? That is so sad.

If a company wasn't making products that met or exceeded my needs and requirements, I'd switch companies. In a heartbeat.

 

[JGIGS]

Mea Culpa for making it seem as though I was criticizing you personally. I’m just getting frustrated at MacRumors in general. There seems to be this undercurrent of hatred these days, and that is directed at Apple for sleights real and imagined.

Sorry I actually meant to type "wasn't" directed at my post. I missed typing the "n't" and I've edited it. I know what you are saying and not everything about Apple is bad but when you start messing up software or not evolving software at the pace of the competition it can kill all that is good about your hardware and services.

 

[Abazigal]

Or, you know, we want to see Apple get better again so that we can at least justify our ecosystem lockdown.

-written from my iPhone.

To be more precise, each of us wants to see Apple improve in the areas which matter to us more. I can get behind that, but I wouldn’t conflate Apple not meeting my product needs with Apple having lost the plot. It simply means their long term goals are no longer compatible with my own, and sometimes, as times change and people change, that’s just the way she goes.

I am loving their iOS product line (already using my iPad Pro way more than my MacBook), while their 2017 iMac refresh was welcome, if a little staid, and it should see me through the next 5-6 years.

I find myself largely unaffected by Apple’s supposed neglect of the Mac, while appreciating their focus on areas like iPad productivity.

Viva la Apple?

 

[Michael Goff]

Sorry I actually meant to type "wasn't" directed at my post. I missed typing the "n't" and I've edited it. I know what you are saying and not everything about Apple is bad but when you start messing up software or not evolving software at the pace of the competition it can kill all that is good about your hardware and services.

It does make it seem worse, I can agree there. But if rumors are to be believed, they’re fixing part of the cultural issue that have led to a few software problems.

 

[Glockworkorange]

How is it cherry picking a statistic? Do you have any sources that disagree with the idea of it being the best heart rate sensor on a smart watch? Do you have any real sources with any real data to back up anything you’ve claimed?


I’d actually like to see this promise of a workstation from Apple. I’d say that it isn’t a case of trusting your word, but it kind of is.


Now we get to the third thing, the idea that the Walled Garden is a miserable quarantine. How? Apple Music just works. iMessage just works for me. I’m not miserable. And the fact that you did little research and can’t see the value in a product that fits perfectly into the Apple ecosystem is on you.






That’s quite the bit of hyperbole there.
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I brought up a guy who is able to do all his work on an iPad, something I’m told is impossible to do.



Telling Apple they always do everything wrong won't make them better, it will just make everyone ignore you.

I don't think anyone says it is "impossible." It is cumbersome , inconvenient and I suspect most tasks can be accomplished quicker and more efficiently using a Mac.

Vetticci is like a guy trying to dig a six foot hole using a soup spoon while a large shovel is sitting right next to him.

 

[Tech198]

Get every last dime out of us!

Only if we give in... With Apple in control, and people forced to like and use their software as much as apple users, APple will win this.

The first step is not buying every single new Apple product out there.

 

[joeblow7777]

Because then they'll try forcing their services that people don't necessarily want to use (otherwise they can't charge less for the phone), and it incentivizes them more to spy on users. Also, I don't think it makes sense to do the service-pushing approach with the OS restricted only to their hardware anyway.

Which is why they wouldn’t have to push as aggressively has Google, Amazon, or Microsoft.

If most of their revenue comes from services, and let’s say that just 30% of iPhone/ipad owners subscribe to some Apple service, increase the number of owners (by making the price more attractive) and you up your service revenue without having to do anything else.

I’m not actually expecting Apple to do this, but as I said, selling hardware at a loss to get people into your marketplace is not an uncommon strategy.

 

[Cosmosent]

RE: "Apple's Services Category Set to Be the Company's Main Revenue Driver Over the Next Five Years"

I disagree 100% !

Apple simply over-played their Hand in Sept of 2017, but the problem is very-easily correctable !

They simply need to focus on offering compelling iPhones at $650 AND Below !

I believe they thought they had ALOT of "suckers" lined-up in their Annual Upgrade Program, who would "blindly" upgrade, regardless of the HIGH price ... but that clearly didn't play-out as Apple's Upper Mgmt had hoped.

Apple has clearly made some significant Blunders the past few years, but things are very-easily fixed !

From my perspective as an App Developer, I see three things Apple needs to address ASAP:

1.) Let's start with the current Lack of Enthusiasm ... 10-bit color capture & display is coming down the Pipe (actually, it's way, way overdue !!) ... whoever gets there first will have Bragging Rights, AND potentially market dominance ... this feature alone could be compelling-enough for EVERYONE to Upgrade ... if the Asian smartphones companies get there first, Apple could be Doomed ... Verizon, At&T, Sprint, & T-Mobile will ALL (immediately) partner with them, and gift ALL existing customers a 2nd smartphone, that piggybacks on everyone's existing lines ... specifically, you'll be able to use either your existing iPhone, or your new Asian 10-bit color smartphone whenever you chose.

The key point to know is that 10-bit color will immediately Render ALL existing smartphones & tablets OBSOLETE !

2.) Rec. 2100 compliance is extremely key, and will result in 1080p HD HDR videos, and is the video format that will dominate in mobile, and probably ALL elsewhere ... ideally, ICtCp with User-selectable Display P3 OR DCI-P3, and NOT the Rec. 2020 color space, which is NOT a good fit for 2018 (it's two to three years out).

ICtCp is a very BIG deal, and needs to be paired with Display P3, both for photo capture & display, and for display of 1080p HD HDR videos !

Apple's decision to go with HEVC encoding for both photos & videos has already paved the path to 10-bit color ... in fact, it is at least 50% of the Reason they made that decision.

3.) Stop trying to sell iPhones & iPads with ONLY 2 GB of DRAM !!! ... advanced apps need "headroom" to operate efficiently & effectively ! ... iOS keeps getting more bloated, & in the way, way too much !

 

[Michael Goff]

I don't think anyone says it is "impossible." It is cumbersome , inconvenient and I suspect most tasks can be accomplished quicker and more efficiently using a Mac.

Vetticci is like a guy trying to dig a six foot hole using a soup spoon while a large shovel is sitting right next to him.

Okay, let me ask you then what these lines mean:
You can’t replace your laptop with an iPad
You can’t do real work on an iPad

How is that people not saying it’s impossible?

 

[Glockworkorange]

Okay, let me ask you then what these lines mean:
You can’t replace your laptop with an iPad
You can’t do real work on an iPad

How is that people not saying it’s impossible?

I'm not saying that.

I think people who say that are wrong.

I think the statements should be it is not efficient to replace your laptop with an iPad for most work tasks and it's not efficient to try real work on an iPad.

It think people engage in a lot of hyperbole, just like when people throw the word literally around all the time.

And using an iPad for general office tasks is like digging a giant hole with a spoon.

I spend the majority of my day in outlook, word and other office type software. I would slit my wrists if I had to spend the day using an iPad.

 

[Partron22]

No devices at all, but extremely popular services.
That sounds like a big Win for Win.

 

[Michael Goff]

I'm not saying that.

I think people who say that are wrong.

I think the statements should be it is not efficient to replace your laptop with an iPad for most work tasks and it's not efficient to try real work on an iPad.

It think people engage in a lot of hyperbole, just like when people throw the word literally around all the time.

And using an iPad for general office tasks is like digging a giant hole with a spoon.

I spend the majority of my day in outlook, word and other office type software. I would slit my wrists if I had to spend the day using an iPad.

I think there are probably some jobs out there that this is just as good, but always use the best tool for the job.

 

[dan110]

You’re confusing ‘revenue growth” with ‘revenue’. I’m not sure why macrumors didn’t use the word growth instead of drivers. Probably fewer page hits.

No there is no confusion. Apple is going to invest where the "GROWTH" is. That's why they've stopped investing in the iPods and Mac Minis. What I said stands. They're going to start investing more in services and less in hardware unless it's to facilitate sales of said services. This is a well-documented tenet of Apple's strategy.