Tech platforms' end-game hasn't changed, but become more transparent: Services
If you've been following me, you know I have been pointing out how Apple has been steadily shifting to become a service company for years. In that regard, iPhone sales that seem so critical to run-of-the-mill analysts are admittedly less and less critical as Apple has pretty much already saturated the worldwide market with its devices (laptops, watches, TV boxes, car media systems, and tablets very much included). Instead of asking how many iPhones they have sold this quarter, a far more interesting KPI would be to know how many iPhones remain in circulation and how many total connected devices are using Apple as a platform. I bet that this number is not slumping down at all.
And yes, this would factor in the 'hand it down' parameter that accounts for all of us buying an iPhone and handing it down after a few years (or just one year) to someone in our family...
We are happy to report that we had an all-time revenue record in services during the June quarter, driven by over 1 billion paid subscriptions, and we saw continued strength in emerging markets thanks to robust sales of iPhone. - Tim Cook, Aug. 2023
Even in China, where the government will be steadily pushing the Californian giant out of the country in the coming years to swap in Huwaei, I would argue that iPhone sales never were strategic in the long term. Apple services never were the flavor of choice in a country where WeChat is the mother of all platforms.
The two core markets where Apple will have to get more market share are undoubtedly still Europe as a region and healthcare as a global vertical. For the exact same reasons(albeit a very different way of becoming a global service platform) as... Amazon.
Philippe MEDA
