There are times when Apple’s strategy is obvious. There are times when a strategy makes no sense. For example, the iPhone line ranges from $449 for an iPhone 7 to $1,449 for a fully tricked out iPhone XS Max.
See? Something for everyone. Mac mini? From $799. iMac Pro? From $4,999. iPad? From $329. iPad Pro? Up to $1,899. So, what’s the problem? Apple sends mixed signals about the company’s new Services strategy.
Clearly Apple has no qualms about manufacturing less expensive hardware. Clearly Apple found a good way to differentiate premium hardware from entry-level hardware. Yet, the push toward ever more Services packages seems to be missing a single ingredient.
Yes, Apple is a well diversified technology company with a number of highly profitable legs, the most recent coming from Services– App Stores, app subscriptions, AppleCare, Apple Music, iTunes, Apple Pay, Apple News+ and soon, Apple TV+, Apple Card, and Apple Arcade.
Is it not clear that Apple wants to extract more revenue and profits from the customer base?
What does the customer base need?
More customers. Duh.
Apple’s executives say the company adds 100-million new customers each year so the customer base is growing but does it not make sense that if the customer base grew even faster that Services would continue to grow, too.
Apple has 40-million Android customers than use Apple Music, and many tens of millions on Windows that use iTunes.
What does Apple need?
More customers. Yet, more Services customers are dependent upon one thing. Hardware sales. Mac, iPhone, iPad. Yet, hardware sales are flat as a pancake. Where would Services be without hardware?
Looking for customers. Duh.
Apple’s big hardware mistake is hiding in plain sight. The company needs more Mac customers, more iPhone and iPad users because hardware sales is what drives Services revenue and profits and there is only so much blood you can squeeze from a turnip, right?