As an Apple shareholder, I wish Apple wouldn’t push for services revenue. How much better of a company would they be, if it was mostly about selling cool devices that everybody wanted to use? Would they make less money? Yes. Would they still be insanely profitable? Also yes!
@jamesthomson Apple is losing focus on just making great products & is now focusing more on maximising profits and boosting its market cap. This cultural shift is souring customer and developer sentiment towards the company and may ultimately damage the reputation of the brand.
The course Apple is on now will only attract more scrutiny/regulation and the situation will continue to erode.
It’s sad to see this unscrupulous side of Apple taking prominence because they still make the best devices!
@jamesthomson Armchair psychologizing, but to me it seems like Apple's embrace of services comes from an institutional memory/trauma of being on a deathbed watch in the 90's coupled with a current workforce conditioned by VC-funded business models from the early 21st century. Always in the back of the exec team's mind is "what happens when we can't grow the hardware business?"
@jamesthomson a lack of services was the thing that killed the newton. Oh sure, it was great and innovative, but you couldn’t do shit with it easily or easily 2 centimeters outside of the case.
Google provided zero services for glass, that worked out well. Devices that exist without services die. It can be argued and well that desktop publishing was the service that saved the Mac.
If I can’t use it in my daily life, why TF would I buy it?
@jamesthomson I wholeheartedly agree—I think there’s certainly the personal financial interest tied to Apple’s success, but I’ve had many moments where I’ve been absolutely disgusted by how the services side of the house is operating.
@jamesthomson I wish they would innovate to gain more services revenue. Why no live-streaming app and service? They could easily make a multi-iPhone live feed video tool combining Final Cut and Facetime… Get a long USB-C cable and your iPhone Pro can become a portable high end live stream system with your Mac. Why no dedicated app for Podcast creators? Or at least modes in Garageband or Logic?
@jamesthomson I am 150% on board with your idealism, but product sales didn't make them a multi-trillion dollar business, and they've caught on to this fact.
@jamesthomson we only get the cool devices because they have been able to grow thanks to the services revenue.
An iPhone without iCloud and other services would not be as valuable as an android. Give a few years, the hardware funds dry up, while android doesn’t. And the iPhone becomes a nice distant memory.
@schwa@Migueldeicaza I also actually think the App Store 15% is a good deal, and would chose that even with a completely wide open platform, as I do on the Mac…
@schwa@jamesthomson@Migueldeicaza Apple Maps is a great example both ways. It’s indeed a service that costs a giant lot of money to build and maintain and is made available for free to users and developers.
OTOH if Apple didn’t allow the use of different mapping engines, my phone would be less useful when I travel to Europe and navigate in places where Apple has bad or no data.
Also, big freemium devs can still use it while effectively paying 99/year and not one cent more.
@amyworrall@schwa@jamesthomson this is a subjective. What vendors offer is rooted in the five market forces (and similar models, supply/demand), not subjective fairness goals.
At best, a segment of users wanting something is a component of these.
A proper business would take these into consideration. But I think today these are already priced in.
I was saying what I think should be the case. My opinion is that after a business crosses a certain amount of market control, they should be compelled to be more consumer friendly than it would otherwise be in their interest to be.
@Migueldeicaza@jamesthomson I thought that “services revenue” for Apple mostly consist of gambling apps (or games more broadly) and Google search kickback?
@Migueldeicaza I’m not saying don’t offer compelling services that people want to pay for. But also, I don’t think without it we wouldn’t have cool devices.
@jamesthomson we could have cool devices, but only for a while. What we love about iOS today is the vast investment that has gone into it, and much of it would be hard to pay for or justify without the services. I wish it was different, but in the end, we all end up reporting to the market forces, or their close proxy, the shareholders and their closer proxy, a board of directors.
@saagar@jamesthomson@markv these are business choices. They are the IP owners and they get to choose a blend that brings revenue and achieves their objectives. With iOS they had a chance for a new business model, and it happened to have worked out. Changes to older platforms risk the ire of customers - like Unity.
@Migueldeicaza@jamesthomson Most of these services didn’t exist until halfway or more into the iPhone and iOS. Several are first party clones given away to entice customers. What we love about iOS is funded by hardware first for that entire time period. The numbers are in the report. Hardware funded services first when it couldn’t generate revenue. So it’s not what we all love and it’s not how we all make money or use the device.
@Migueldeicaza@jamesthomson So your argument is that the company’s financial guidance to money lenders, versus the actual numbers, is how we plan our living. I’m aware of how public companies work, including Apple, having spent more than a decade at that one and others. Services DID NOT have a core focus until the forcing factor of declining hardware adoption and overall industrial shift. Your experience and opinions are not sacrosanct and this does not require condescension.
@Migueldeicaza@jamesthomson It’s an interesting theory that Apple threaded their services needle to perfectly balance the transition from hardware. It doesn’t line up with reality - App Store and iTunes supplemented Maps and all of iCloud for years as free, then they went subscription for majority of new development along with upselling.
@bgannin@jamesthomson they did, that’s why the stock did so well- they showed a very good strategy and growth plan. And the higher stock price afforded them luxuries like bonds loans they couldn’t have obtained otherwise.
@Migueldeicaza@jamesthomson As always, why does the largest valued company in the world need to operate on credit instead of paying its bills? Because capitalism rewards excess. You are simply arguing that it’s the right and true path and that they were geniuses. They aren’t. They weren’t. Hindsight is lovely but I was in the actual building.
@bgannin@jamesthomson I am sorry, I don’t have time or desire to explain corporate finance to you. Apologies. You are going to have to learn this on your own.
@Migueldeicaza@jamesthomson I did in college for my degree, I don’t need your interpretation. Hubris is unbecoming and this is a sadly common tactic. Enjoy your high horse as you pontificate at an entire community. You could have civilly ended the conversation but you want some kind of high handed Pyrrhic victory. You go girl.
iPhone makes more than enough money to fund its own development
Android makes way less, the idea it would overtake iOS without Services $ is laughable
Apple would still make a ton off Services even if they didn't squeeze every bit
A huge portion of that Services revenue has gone to totally unrelated projects like TV+ and visionOS and their still-in-development car, not to improving iOS; Services is why Apple gets to horrifically overspend on that stuff
@Migueldeicaza@jamesthomson The cash war chest is quite full. This is primarily about a seamless transition while maintaining shareholder loyalty to minimize impact/notice. They could subsidize any number of pain points rather than grow that offshore hoard. But that’s not “shareholder value”. I’m with you 99% of the time but they are maximizing for that at all costs at all times. It’s not about avoiding shrinkage. Example A: opportunistic price increases currently despite high churn rate.
@jamesthomson I don't think this will ever be the case, unless the target audience gets the majority of shares in hands. The unfortunate truth is that most shareholders only care about profit, no matter which company.
How many Apple users would it take buying buy $1000-$5000 worth of shares to get them to change?
@davidhmccoy I’m not saying don’t have services, but I think the push for maximising revenue from the services division has led to almost all of the poor decisions Apple has made recently.
@davidhmccoy Makes no difference to me financially, I would be in the App Store either way. But is indicative of poor decisions being made for financial reasons, in my opinion.
@jamesthomson I’d rather them make great tech and make me less money but they don’t care about us small investors, they only care about institutional investors.
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