Apple’s Embrace of Smart TVs is Smart, Necessary, and Late (Premium)

Earlier this week, we learned that Apple’s iTunes and AirPlay services are coming to Samsung smart TVs. But it’s not just Samsung. Instead, Apple has finally woken up to reality and is embracing smart TVs across the board, and from a variety of manufacturers. And this action says a lot more about Apple’s future than do the words of its executives.

Apple, as I’m sure you know, delivered a blockbuster warning about iPhone sales last week, setting the stock market on fire and jeopardizing the retirement savings of billions of people in the process. But as I later wrote, no one should have been surprised by this warning, let alone Apple, since we’ve had months, if not years, of warnings.

Apple’s problem is simple: It’s a one-product company and that one product is no longer growing. Is, in fact, in danger of becoming an ever-smaller asset over time. In doing so, it will take Appl down with it, and this one-time trillion-dollar beast will be shown to be as mortal and vulnerable as any other one-hit-wonder in Silicon Valley. I’m looking at you, Facebook.

Apple has known about this problem for years: We reached peak iPhone---and thus peak Apple---over two years ago. Since then, the upgrade time-frame has grown from two to the three years (explaining the iPhone upgrade program) and, more recently, is growing past that (explaining the low-cost iPhone battery replacement program and the first-ever instance of an iOS version actually making older iPhones work better). But the collapse has accelerated recently, as evidenced by a 20 percent decline in new iPhone sales year-over-year (YOY) thanks to the lackluster iPhones XS and XR (leading to Apple doubling the value of iPhone trade-ins). Maybe that giant “Apple Jacks” price hike played a role. OK, not maybe.

All those parenthetical actions above were incorrectly seen, especially by Apple bloggers and fanatics, as evidence that Apple loves its customers. But that’s hilariously incorrect. Instead, Apple loves only the money that those customers can generate. And since the traditional way of wringing cash out of the faithful---selling them expensive new iPhones on a regular basis---is no longer working, the company has started implementing a new strategy. Which they brag about now, by the way. It’s called Apple’s Services business.

Tim Cook’s open letter to investors about the iPhone sales shortfall is chock-full of references to this quickly-growing business. Apple’s “results in China include a new record for Services revenue,” he noted. The Services business experienced “all-time record revenues” in the most recent quarter “and the vast majority of Services revenue is related to the size of the installed base, not current period sales.” In fact, revenues from services in the last quarter was $10.8 billion, “a new quarterly record in every geographic segment.” Apple, Cook says, is very much “on track to achieve [Apple’s] goal of doubling t...

Gain unlimited access to Premium articles.

With technology shaping our everyday lives, how could we not dig deeper?

Thurrott Premium delivers an honest and thorough perspective about the technologies we use and rely on everyday. Discover deeper content as a Premium member.

Tagged with

Share post

Please check our Community Guidelines before commenting

Windows Intelligence In Your Inbox

Sign up for our new free newsletter to get three time-saving tips each Friday

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

Thurrott © 2024 Thurrott LLC