At the presentation of Apple March 25, 2019, the American company has not submitted any device key innovations shown during the ceremony, was streaming video service TV+ News aggregator subscriptions+, credit card and Apple Card game project Arcade. This is not the first case when the iPhone maker has managed at such events without “iron”, but before the service products were traditionally presented at the summer conference for the WWDC developers. Forbes examined why this time the company has not revealed any new computer, laptop, tablet or smartphone at the spring presentation and does focus on the services end of an era “iron”?

Road services

Revenue from iPhone sales in 2018, seems to have reached a maximum. In absolute values, the range of smartphones is still the main source of income for Apple, but relative growth rates above those of other business segments. Most of them last fiscal year (ended 29 September 2018) added services, as well as other devices.

Revenues in million dollars

Products

iPhone

155041

136700

141319

166699

23227

20628

19222

18805

25471

22831

25850

25484

Services

19909

24348

29980

37190

Other products

10067

11132

12863

17417

Total sales

233715

215639

229234

265595

Other devices in the same period grew even faster (35% vs 24%) and continued to show the same dynamics in the first quarter of 2019, the fiscal year is already being renamed as “Wearable and home devices and accessories” (33% growth in the quarter versus 19% in services). This category includes the Apple “smart” column, AirPods headphones and of course the hottest product segment — Apple watch. However, the only new “device” — the second generation of AirPods company also showed up to the March presentation, announcing the device through a standard press release distribution. All went to the fact that the ceremony will be dedicated to the service of a new strategic agenda for Apple.

What do the new

The key novelties, presented on March 25th, was not a secret because of leaks before the event. As expected, Apple has expanded the possibilities and range of streaming video service, called Apple TV+. The company also introduced a subscription service for 300 magazines and Newspapers for $10 a month and gaming service in a similar model (in Arcade will be available not massive multiplayer battles and more modest “personal” game).

The most obvious and popular version of the extension of service line Apple trying to catch up with successful competitors. TV+, to which the company has invested significant resources for the production of high-budget original content, obviously, is to become the most influential alternative media service in the world — streaming platform Netflix. But not only the suppression of the company reed Hastings worried about Tim cook and his team: services — it is also a great chance to diversify the business, to find a new driver for revenue growth in an era when the “magic” of the iPhone on the outcome, and accessories until you bring a comparable income.

Besides the audience, spoiled by a wide range of “iron”, more loyal to the services. To develop a device that will not be able to repeat competitors through year, today is much more difficult than running a quality service platform: if the latter is loved by the users, they will have no incentive to spend money on alternatives. Judging by the lack of breakthroughs in hardware devices, the current stage of technological development has exhausted itself (except, perhaps, folding screens). But streaming services are developing rapidly.

Major media companies are willing to pay higher amounts for exclusive content, as evidenced by a series of mergers, toughening competition in the market. So, Telecom giant AT&T in 2018, has closed the acquisition of Studio Time Warner for $85 billion And recently, Disney absorbed the legendary 21st Century Fox for $71 billion Now, both of these conglomerate can choose to join Netflix on the path of independent development of their own platforms or become a part of streaming Apple designed to accept someone else’s content. The same applies to media: the newspaper The Wall Street Journal, for example, declined to become part of the News+ to maintain direct but not indirect contact with the base of its subscribers.

Competitive advantage of new services Apple, which has repeatedly stressed the participants of the presentation on March 25, will be the privacy of users: the company could not to play the alarmist sentiments of the audience in connection with a massive leak of personal information, is not prevented even by such giants as Facebook and Google. The assurance of Apple, even movies on the streaming platform, the algorithm will recommend this way to not save and pass on data to third parties, including advertisers.

Pedaliruetsya the topic of privacy and the project Apple Card: titanium card with a minimalistic design, which will be supported through the Bank Goldman Sachs, protect sensitive data — they even lacked the usual number and CVC code. But more important for the user experience, albeit more mundane advantage of cards will be two per cent cashback on all purchases Apple in this project are willing to sacrifice maximum efficiency for the sake of the accumulation of loyal audience.

Where to stop the tech giants in the new competitive race, it’s unclear. Trend, which indicates the vector of development of Apple — omnivorous: companies previously famed for its tight ecosystem, now is not so important where the user will communicate with its services — TV+ supports “smart” devices from other manufacturers. Most importantly — capturing the audience and providing its content.

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