Apple Solidifies Its Transition to a Services Company

It’s no surprise that Apple is changing. As we’ve seen in the past couple of years, smartphone sales are flat, and the company’s other hardware doesn’t make the splash in the market that it used to. Sure, the Apple Watch is selling well, with Apple taking more than half of the global smartwatch market, and the company’s wearables–the Apple Watch and AirPods–are “approaching the size of a Fortune 200 company,” according to Tim Cook.

Apple knows that the hardware market is getting tougher, as smartphones become commodified and price pressure will make it difficult for the company to maintain the current prices and margins of their flagship devices. In early 2017, Apple said that they would double their services revenue by the end of 2020, and the company is on target to do so, even if the growth in services income is slowing.

Apple’s March 25 event was interesting in that the company did not present any new hardware (but had updated a number of products the previous week, without any fanfare). It opened with an explanation of what “services” are. This was a curious choice, as though the presentation was more for shareholders than consumers or the press.

Apple introduced several new services on March 25: news, TV, games, and a credit card. (Read our overview of the March 25 event.) These services are going to help Apple solidify its non-hardware income, but also start pointing toward a potential bundle of services from the company.

Read the rest of the article on The Mac Security Blog.

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