Apple serious about services, but wants you to ‘pay the price’
The iPhone will remain Apple’s main driver — even if it slid to just 48 per cent of the company’s total revenue in its recent fiscal third quarter
If Apple indeed intended to launch a 5G smartphone this year, it did a good job of making up for not being able to do so with a number of handy new offerings. However, we can stow away the new iPhones for now and set our sights on something the tech giant has been very busy on for some time now — its services unit.
Technology companies have recognised the potential and value of non-hardware offerings. There are tried and tested formulas — Netflix among the most successful — but the ambiguity can blur the lines when it comes to differentiating service providers.
Trying to set apart one’s service can be difficult, especially when the standard setup is the typical pay-the-fee-and-use-it model. Value propositions vary, but it can boil down to the if-it-works-it’s-fine reasoning.
Yet Apple, in typical better-late-than-never fashion, threw in a wrench — a ‘pricey’ one at that.
They’ve pulled the rug from under Netflix in terms of pricing for its Apple TV+: Its monthly subscription of $4.99 is almost 50 per cent less than Netflix’s starting asking price of $8.99. Google Stadia, meanwhile, found itself
hit with an upper-cut of sorts even before its November release when Apple announced that its gaming subscription platform, Apple Arcade, will be charging the same amount as that of TV+ — or half of Stadia Pro’s $9.99. For further comparison, YouTube Premium clocks in at $11.99 monthly, while YouTube Music will set you back $9.99.
All of these service providers may be forced to rethink their pricing with Apple’s chessesque move. And if those price schemes weren’t enough, Apple threw in one more thing for good measure: Those who purchase an iPhone, iPad or Mac starting on Tuesday, the day of the keynote, will get a year’s subscription to Apple TV+ — for free. Most others offer only a free month’s trial
If lower prices would mean more enticed subscribers — as we’ve pointed out here recently — then that’s something that would work from a business point of view. Apple applied the same strategy to the iPhone 11, lowering its starting price from $749 to $699 (Dh3,179 to Dh2,949).
Apple isn’t joking with its TV+ offering, having pulled in a number of big names to its originals fold, including award-winners Reese Witherspoon, Jennifer Aniston and Steve Carell, multimedia mogul Oprah Winfrey and a host of producers and ‘storytellers’.
Apple Arcade, meanwhile, has the backing of the biggest names in the industry, including Konami, Capcom and Sega, plus event the likes of Cartoon Network and Lego. Apple’s services division has consistently posted record revenues in recent consecutive quarters, helping the company’s bottom line, playing a key role in breaching the coveted $1 trillion market capitalisation milestone and helping it stay a perennial threat to that mark.
The iPhone will remain Apple’s main driver — even if it slid to just 48 per cent of the company’s total revenue in its recent fiscal third quarter, the first time it was less than half since the fourth quarter of 2012. Just imagine what would happen if iPhone sales bounce back and services continue its rise.It’s a gambie Apple was willing to take — and classic, too: Doesn’t matter if they’re not the first, as long as they get it right — maybe even better. Good followers make good leaders, as they say.