Under CEO Tim Cook, Apple increasingly shifted its focus from hardware to additional paid services.
(Photo: dpa)
The most valuable company in the world is reinventing itself. Apple has become the world’s most powerful brand thanks to the iPhone. However, services have developed into secret profit drivers. Apple is redefining the rules of the game in the technology world.
An impressive figure emerges from the recently published quarterly figures: The gross margin in the company’s service offerings was 73 percent. For the first quarter, Apple reported sales of $19.8 billion at a cost of $5.4 billion. For comparison: For hardware such as iPhones or iPads, the gross margin was around 36 percent.
So far, Apple’s services have focused exclusively on end customers. It changes. With “Business Essentials”, the company is also offering solutions specifically aimed at companies for the first time. CFO Luca Maestri announced that he intends to expand the offer, which has so far only been available in the USA.
Apple has succeeded in creating a tightly interwoven world of high-quality hardware products and precisely coordinated software offerings. Now the phase begins in which the group continues to expand this ecosystem.
Top jobs of the day
Find the best jobs now and
be notified by email.
The range already extends to a number of areas. The company offers films and series via Apple TV+ and this year was the first streaming service to win the Oscar for best film with the tragic comedy “Coda”. Apple is constantly expanding its range of music. Offers for cloud storage, fitness, mobile payment, news or books complete the portfolio.
The Apple production was the first film from a streaming service to win the Oscar for best film.
(Photo: dpa)
The success of the services is also based on the hardware. The offers are closely linked to the product cosmos. Streaming, fitness subscriptions and cloud services only make sense in combination with an iPhone, iPad or Apple Watch.
Apple is likely to try to significantly expand the service area. When asked if he wanted to buy the Netflix streaming service, Apple boss Tim Cook responded openly. Apple buys many small companies today, but a large takeover is not out of the question. “We’re always looking around,” Cook said.
Right now could be a good time. Since October, Netflix has lost more than 70 percent of its market value. And with net income of $25 billion in the first quarter alone, Apple has more cash for acquisitions than any other company.
Metaverse as the next test
Other corporations are amazed by this development. It is no wonder that the head of the Facebook parent company Meta, Mark Zuckerberg, accepted a loss of more than ten billion dollars with his experiments to build a metaverse last year. He’s trying to copy Apple’s recipe for success.
With the Oculus glasses, Zuckerberg wants to create the crucial devices that pave the way to the metaverse. The company is already demanding huge sums of money so that third-party providers can offer their products via metas virtual worlds.
There are many indications that Apple will soon be launching its first VR glasses. For CEO Cook, it will be a test that Apple can play a similar role in virtual worlds as it does today in smartphones and tablets.
More: The $8 billion risk: Apple warns of supply chain problems