Apple services have been wildly successful. They work well for Apple and its customers. In time, there will be many more.
Conceptually, Apple’s first service was AppleCare, though it doesn’t appear on Apple’s list of services. It was a very early seed of an idea such that you pay Apple money but don’t receive some kind of hardware.
By and by, we got iCloud storage—for a fee—at higher storage levels. The legacy services, I would say, are:
- Apple Books
AppleCare is very profitable and sales people, at least in the past, have been pushed for a high “attach rate.”
The more modern services include:
And just launched or launching soon:
- Apple One
- Apple Fitness+
If it seems like Apple is releasing services at a dizzying pace, you’re not alone. So what’s Apple’s motivation? It’s money. In the quarter ending June 27, 2020 Apple’s services revenue was just over US$13 billion. It’s over $46 billion annually. That services business alone would “place it in the top 70 of the Fortune 500 list of biggest public companies.” And revenue has been climbing fast. More services means more revenue and profits.
Unlike competing streaming TV subscriptions which can generate subscription fatigue, Apple services can be viewed as a pleasing, productive enhancement of one’s integrated Apple life. They complement each other rather than competing with each other. No wonder Apple has arrived at the notion of bundes.
Financial analysts love services because, according to Fortune:
Gross profit margin—the difference between sales and the cost of generating those sales—was about 64% for services last quarter, double the 32% gross profit margin for Apple devices, Apple reported last year.
Apple loves services for another reason. They work to retain customers. For example, Apple Pay and Apple Card only work with Apple products. Switching away from Apple hardware can mean a painful loss of secure, favored, well crafted services.
New services from Apple will continue unabated. If you feel overwhelmed, just remember to focus on what you really need and ignore the rest. Not all customers subscribe to all Apple services, so don’t feel left out.