Hardware is likely to become a dead-end source of revenue... eventually. I assume Steve Jobs would have seen this coming and done much of the same things in terms of revenue diversity.
Is that why the parasite called Google is paying Apple 12-15 billion PER YEAR for the default position on the iPhone? Services, Streaming, and Ad’s are nothing without Apple hardware and software, and in house OS bringing home the bacon….nothing…….
The worst punishment Joe Consumer can inflict on Google is to stop using their search engine. The second would be to stop using Google Chrome. The third would be to eliminate Gmail. Alphabet's primary revenue stream is still Google AdWords after all these years.
YouTube is really, really hard to quit cold turkey but if you can ditch Google Search, Gmail, and Maps, and to use a different web browser you've probably eliminated 90% of their datapoints.
I think Apple should take a thought on what they want to offer and to who. It starts to get a bit unclear and unfocused again. When Steve Jobs revolutionized the industry it was with unique hardware never seen before and it filled a gap. Can we see the same in software and services from Apple? It is trickier. But I love Mac OS, in my opinion the best product from Apple.
It's too bad Apple can't figure out a way to make a metric crapload of money from producing great hardware...
You are missing the point. In fact, you are missing several of them.
The first is that this is restructuring the Services business unit which has been the fastest growing business unit for years. Apple turned Services into a business unit and started tracking them discretely because of its impact on revenue (important disclosure for investors). Note that Services makes hauls in twice the revenue as Mac hardware:
Apple's hardware growth is heavily weighted toward new product categories like Apple Watch, not Mac or iPhone sales. In some markets (like most of the G-7 nations), iPhone is considered a mature market.
If Apple wants to make a ton of more money from existing hardware product lines they need to A.) ship more product, or B.) increase gross margins. Solution A is going to be a bit difficult with current supply chain constraints. There's also the question of whether or not the market is there. Solution B is a delicate balance between making tons of money and pricing your product out of the market. COGS isn't going to go down with current supply issues.
Apple has been gravitating toward streaming for years and unsurprisingly that's where all of the action is happening in some areas like music distribution. Who goes to Target to buy the latest Taylor Swift album on Compact Disc? I assure you that they still sell them.
Advertising is a trickier nut to crack based on Apple's privacy stance. But each time a pair of eyeballs is looking at an Apple-hosted ad, there are not looking at a Facebook nor Google hosted ad. Apple doesn't need to "win" the advertising wars. They just need to make the competition suffer by taking away a significant number of ad impressions. That's doable.
Streaming and advertising go hand in hand. When you have popular content, you'll have more eyeballs and you can command higher advertising rates. Do you know what a 30 second spot during the Super Bowl halftime costs?
Knowing Apple's M.O., we know they won't try to blanket the Internet with ads. They will carefully focus on the high end of the market. They don't need to display the most ads, they just need to make the most margin for the ads they sell.
I'm pretty sure Eddy Cue and his team know what the ad rates are for major sporting events are. As well as other major non-sporting events. Moreover they also know what the online streaming rights for such events cost. Apple will look for maximum margin. That's how they rake in the bucks.
I know it is pretty common to find people on tech site Q&A forums (like AppleInsider as well as similar sites) who think they can run Fortune 5 companies better than the people who actually do but I assure you that Apple has a few people who actually know what they are doing.
I just wonder, where is the true consumer focus in all of this? What does consumers get out of it?
Hardware is likely to become a dead-end source of revenue... eventually. I assume Steve Jobs would have seen this coming and done much of the same things in terms of revenue diversity.
Is that why the parasite called Google is paying Apple 12-15 billion PER YEAR for the default position on the iPhone? Services, Streaming, and Ad’s are nothing without Apple hardware and software, and in house OS bringing home the bacon….nothing…….
Nice to see the two big tech giants working together, each washing the other's hands. /s
Comments
The worst punishment Joe Consumer can inflict on Google is to stop using their search engine. The second would be to stop using Google Chrome. The third would be to eliminate Gmail. Alphabet's primary revenue stream is still Google AdWords after all these years.
YouTube is really, really hard to quit cold turkey but if you can ditch Google Search, Gmail, and Maps, and to use a different web browser you've probably eliminated 90% of their datapoints.