The iPhone was then just a couple of years old and more of a success in the US and Europe. But then the country head of a top mobile phone brand was certain Apple was making a couple of hundred dollars at least per user every year in the US, that too just from apps and music. His company, he told me, despite its might could only dream of something like that.
Eight years on, Apple’s transformation into a services company will be near complete when the products it announced last night start rolling out end of the year. Apple is betting on multiple services — original and exclusive video and gaming content and a one-stop shop for magazine and news subscriptions. Each of these seem aimed at a different kind of user and experience.
Let’s start with Apple News+. This is in a way a nightmare for publishers who have wanted people to move to their own sites or apps to consume the content they have invested in. But not everyone has the distribution might of a New York Times to play hardball and stay off the platform. This might mean good news for magazines though, as very few of them are online success despite being great offline products. Also, customers stand to benefit as they don’t need multiple apps or subscriptions to read these titles anymore.
Now Apple TV+ offers original video content. But Apple has one trick up its sleeve. While a Netflix and Amazon Prime offers original content along with licensed shows and movies, Apple TV+ will offer only original content. But Apple has also expanded its audience for Apple TV by opening up the app for smart televisions of other brands along with Roku and Amazon’s FireTV. This seems like a leaf Tim Cook has taken out of Satya Nadella’s book.
With great quality Apple knows it can get people to pay, whatever the device or operating system its app is on. It has done this successfully by opening up Apple Music earlier. And by pulling in big guns line Steven Spielberg and Oprah Winfrey it might just be able to offer the content pull it needs.
The game is a bit more intense when it comes to Apple Arcade, its premium subscription services for gaming. It does two things — offer a platform and discoverability for niche, but good quality indie games, and also offers gamers a low cost option to access multiple games. The latter, with the right kind of titles, might just offer enough pull for some gamers to opt for an iPhone or another iOS or Mac device just to access these games. Gamers are that sort of customers. If Apple is to sell more devices because of a service, then it would have come full circle in terms of being a services company.
Apple being Apple, don’t be surprised if it manages this.