The closed system is Apple’s biggest strength. I like their strategy and investors confirmedearlier this year they like it too (Along with the fantastic Tim Cook). Even if it’s not valued as a pure services play, it can be valued as a consumer products company, which gives it a multiple in the 20s.
Yes. I agree with the bold wholeheartedly. Consumer products company. NOT a services company. If you think about it, providing external services risks confidentiality even more which is against their mantra.
They will be known for being a product company with their own closed ecosystem that has everything working (??) harmoniously together.
What will be interesting in the coming years is how their investment into the media streaming space will affect their revenue.
I see a few risks in Apple's future:
- They burn a lot of cash on original content with failed results. There were early glimpses of this happening (see SJ's attempt to court content owners)
- Google figures out their product user base or even start locking their OS down. This means they actually focus on user experience and not be completely stupid
- A new worthy competitor emerges
- User growth become stagnant due to hardware ownership ceiling
Now the flip side could happen:
- Apple's original content becomes an enormous success prompting huge Apple TV growth, and Roku experiences a hit to their ecosystem. Apple creates a nice accessible living room experience with all their products (both hardware and software).
- Google continues to fail at figuring out the user base
- No new worthy competitor emerges