Apple windfall ?
Apple “keynotes’ don’t quite command the attention that they used to. That’s not a surprise as they enter a mature growth phase where they are a ‘defender of share’ more than a disrupter.
Monday’s occasion was a good example which was based on service rather than hard product and really was more of a whimper than a bang.
But let’s get something out of the way, with approx. 1 billion active Apple devices around the world whatever Apple launch will be successful. They know a lot about their fiercely hardware loyal consumers and, as I say repeatedly, they created a reliable and easy to use operating system which is effortless for users from 7 months to 70 years and beyond. Their services business earned them over $10.9 billion in the last quarter and they are on the record as saying they are due to double that business from 2016 to 2020.
I just don’t happen to think that launching a credit card (focusing on this also being a physical card makes me wonder if Apple Pay isn’t quite as sticky as they had hoped - in London coral pink Monzo cards quickly took over from iPhone use at subway gates) or a few subscription based products (some just a repackaging) will change the world.
iPhones and iPads are superb pieces of hardware but that doesn’t mean that the user is beholden to the entire Apple offering. Spotify have just over 200 million active subscribers and almost half of those are paying subscribers. I'm one of them and haven’t bought or streamed a single track from Apple in years.
Their $9.99 monthly subscription to Apple News+ must leave very little for the suppliers of content (rumour is Apple want a 50% cut of this revenue) and that probably explains why it’s a lot more magazine than news.
This all goes to the heart of consumer choice. Apple have created a very reliable ‘walled garden’ but sometimes the walls feel a little constraining. That’s why we jump at competitive offerings such as Spotify and Netflix or rather go direct to publications for the benefits that direct loyalty will bring.
Consolidation is beneficial for Apple but is it right for every user ? Time will tell.
About the Author
The author is a brand consultant and founder of Mission Critical, a high focused and curated weekly briefing for time poor and information hungry decision makers.
