“2019 is the biggest year in Apple’s history for service business… Apple has been working on deep integration of hardware, software, and services, so in 2019 they are being pushed to new heights. In early 2020, Apple published an article on its website titled “Apple Enters a New Era in service Business a Year After the Milestone.”
In the article, Apple summarizes the results of the 2019 service business, but the company’s services are more than just some good-looking numbers on the books for the hardware start-up.
2019 is a service
The App Store generated $386 million in sales on January 1, 2020.
Since its inception in 2008, the App Store has been not only the most profitable business in Apple’s services, but also the world’s most active app market. Apple concludes that the App Store has generated more than $155 billion in developer revenue since 2008, a quarter of which will be in 2019 alone. While many developers complain about the high level of platform growth, the App Store has objectively driven the Internet industry over the past decade, but has also created many new jobs.
In addition to iOS, macOS, watchOS systems and the App Store, Apple has built a service ecosystem over the years.
With more than 60 million songs in its 115-country network, Apple Music has not only reached apple hardware, it has also started landing on platforms such as Android and Windows, making it a reflection of Apple’s service over hardware.
At its spring launch in early 2019, Apple had no hardware, instead releasing streaming platforms Apple TV Plus, Apple News and Apple Arcade.
Apple TV Plus has been available in more than 100 countries and territories since its launch more than two months ago, and has been nominated for awards such as the Golden Globes and the Screen Actors Guild Awards.
Apple TV Plus Original Episode “Morning News” – Apple’s website, nominated for the 77th Golden Globe awards
Apple News has more than 100 million monthly active users since it went live in the U.S., U.K., Australia and Canada last year. In the 2020 U.S. election year, users may want to get more comprehensive news coverage, and Apple News, a form of convergence of different media, and the election theme apple news and ABC plan to launch this year will make the service more attractive.
As for Apple Arcade, the much-anticipated gaming subscription service, it’s not much of a year in 2019. Apple didn’t give specific user data, only highlighting more than 100 games and cross-platform benefits in arcade services.
The Apple Card, launched last year, is also in full use in conjunction with Apple Pay. Apple said Apple Pay will continue to roll out its payment service in the Pearl River Delta region in 2020. Apple Pay has also been incorporated into Apple’s major hardware offerings and has become an important part of Apple’s ecological interaction.
The most profitable app platform for developers, a high priority for privacy, consumer-facing cloud storage services, one of the world’s largest streaming music services, award-nominated video content as soon as it is launched, and the first to open game subscriptions and news subscription models, mobile payment systems on and offline, and even selling better and better Apple Care… If Apple is realizing Jobs’s vision: hardware is a software carrier. So Apple, which wants to make the best hardware, may also be breeding the best service.
On January 2, the second day of the New Year, Apple’s share price exceeded $300, giving the company a market capitalisation of nearly $1.35 trillion. Apple’s shares rose 86.2% in 2019. As of the time of writing, Apple’s share price was $320.
On the other hand, Apple’s core hardware, the iPhone, has been cold in the market over the past decade, with Apple’s revenue share falling from 63% in 2018 to 55% in 2019, leaving Samsung and Huawei behind in the global mobile market. The weakness in iPhone sales does not represent Apple’s decline in hardware.
Apple’s AirPods sales reached 60 million in 2019, generating nearly $6 billion in revenue, according to global Bluetooth headset sales and earnings forecasts 2001-2024 released by Research Firm Analytics at the beginning of the year.
Global Bluetooth Headset Sales Statistics 2019 – Strategy Analytics
In the third quarter of 2019, 14.2 million smartwatches were shipped worldwide, and Apple Watch had a 47.9% market share with 6.8 million sales. IPad sales also increased 4% year-on-year and total revenue grew 8%.
Hardware continues to generate revenue, and Apple continues to push for new revenue, with the iPhone shrinking in Apple’s revenue and wearables and digital services accounting for a growing share of revenue.
Apple didn’t release any thing about the hardware in 2019, and the hardware-free spring launch in March was even more impressive than the WWDC in June and the iPhone 11 launch in September. Apple’s shift in focus is not just in the launch, but in its ongoing promotion of services, highlighting the company’s success in soft power, such as privacy, such as app stores, and increasingly sophisticated and interoperable OS systems.
Today, Apple’s service line of business has outstripped the hardware product line, and services are as obvious as software, and are hard to spot. An Apple device must be associated with at least one Apple service, the more devices, the more services used, users in Apple’s carefully built walled garden more and more faraway, Apple’s service is difficult to leave the garden reason, Apple’s hardware will become the annual fee to stay in the garden tickets.