Apple this past Friday left the trillion dollar club, albeit briefly, as the firm reported it would no longer be reporting sales figures for its hardware, eschewing the numerical breakdowns it used to provide for its iPhones, iPads and MacBooks for over 20 years. Instead, the firm will note much revenue and profits it makes from hardware.
This represents an acknowledgement of the new post-smartphone world. Smartphones no longer sell like gangbusters since everyone already has one, the more important thing to look for from a company is how well it retains customers across upgrade cycles, typically a 2 – 3 year period. Apple has built its smartphones to be usable for that long, even ensuring that its latest iPhone updates don’t frustrate the users.
But there is a con to all this, for Apple to keep its profits, it will need to get its customers to pay more money, and on a regular basis, to offset the loss. This change is already made manifest in the way new iPhones now start at just shy of a $1000. Aside from the iPhones, Apple wants you to buy into its whole exosystem. You’ll need an iPhone XS, an iPad Pro, perhaps a HomeHub or two, subscriptions to Apple Music and iCloud, a rumoured upcoming bundled news subscription, and so on.
It’s already expensive to buy into the Apple ecosystem, but with the iPhone slowly losing its golden goose status, it may become even more so.