In the old days of a moment ago, Apple would kindly point out that when you use free services that mine your data to sell for profit, you become the product. But Apple’s new strategy means that most of its users are also becoming commoditized, albeit with an Apple twist.
I’m talking about average revenue per user.
Apple’s beautiful game
Playing a game as skilful as that of the England women’s team (*See below), Apple has recognized that its hardware products are a platform with a unique audience. The characteristics of this audience allow the company to generate engagement, customer loyalty and growth (important for a large, cursed multinational tasked with seeking constant growth in a global economy facing existential transformation).
In “interesting times”, growth is impossible unless you develop certain features, which Apple already enjoys. In a recent email shared with me, july asksForrester Research VP and Principal Analyst noted several of these traits:
- Apple customers tend to be wealthier than those of competing platforms. I have seen claims The median income of an Android owner in the US is $69,647, while that of an iPhone user earns $88,256.
- On top of that, 35% of Apple iOS owners have a household income of more than $100,000 per year. An iPhone user is also three times more likely than an Android owner to have a total household income of more than $300,000/year. (Note: this does not apply to Apple journalists, by the way.)
- 18% of Apple users only own Apple devices.
Add to this the company’s recent claim that in its most recent quarter, customer satisfaction and loyalty hit an all-time high across all of its major product categories across all geographic segments. It also told us that almost half of those who bought a Mac or iPad, and more than two-thirds of those who bought an Apple Watch, were new to those products.
What is the effect of all this?
It means rain or shine…
…Apple is weather resistant
While the macroeconomic climate appears gloomy, Apple management told us the company can’t make enough iPads or Macs to meet demand and hasn’t seen an obvious impact from the increased gloom on its iPhone sales.
Apple’s best-selling product, the iPhone, generates about 49% of the company’s net income, although it’s interesting that services now account for 23.6% of net income, according to most recent statement.
At the root, of course, as I’ll keep saying, Apple’s turn to services (despite bugs like CSAM scanning and ads in the App Store) rests on strong, high-quality personal privacy. Those fundamental principles are best evidenced by the hundreds of award nominations won by Apple’s TV+ service this year and its numerous commitments to user privacy.
The thing about the services the company provides is that it knows its audience. You know your customers are loyal, happy, and have a high degree of confidence in the company’s ability to do the right thing (with exceptions). What else do you know about your audience? They tend to be wealthy with a high representation of creatives and knowledge workers.
That’s why when the company tells us that it now has 860 million paid service subscriptions on its platform, it’s telling us that, even in an economy depressed by hardware sales, it has advantages.
You have tremendous opportunities to turn those customers into products or, to be much fairer, turn them into the high-quality services you provide.
Apple is attracting five new subscribers every second
Apple’s trajectory is still quite visible. In the last 12 months, the company has been attracting 438,000 new subscription customers every day. To explain this, the 160 million new subscribers that Apple attracted to its services over the past year means that it is currently attracting five new subscribers every second of every day.
Apple has a service-driven advantage of at least $1 billion dollarsaccording to Morgan Stanley.
- Take Apple Pay. Apple Pay usage in the US grew from 12% in 2020 to 21% in 2022, and growth has been even faster elsewhere. Nearly one in five American adults use Apple Pay today, and around one in 10 adults use the service in Europe.
- Subscriptions are becoming fashionable. Forrester Research tells me that 76% of US online adults use at least one music or video streaming service. They adopt them to save time, get good deals or save money; they reject them because they want to avoid high fees or long-term commitments, the analysts said.
The difference between Apple’s business plan and so many others in Silicon Valley is that while others offer compromised products for free to make you the product, Apple makes you pay for the products you use. Although, as the data shows, their solutions are still just as addictive. You’re still the product, but that mix of privacy and agency is Apple’s unique touch.
*One more thing:
I mentioned the England women’s team. The world watched that match. More than half were cheers as the women achieved what the men had failed to do for 60 years and brought the trophy back to the UK. We know that Apple is invest in sports entertainment. We also know that the United States will go soccer crazy in the years to come. as the world cup approaches. Apple is buying the rights to broadcast some of those games. someone needs to talk to eddy cue: In a changing world, women’s football may become the fastest growing new sporting opportunity, and if the company wants to develop its TV+ service while upholding its values, investing in sports rights for women’s football tournaments seems a smart bet.
It’s funny to say it, I know, but maybe sarina wiegman It’s the new Ted Lasso…
Copyright © 2022 IDG Communications, Inc.