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Great that they've been able to grow their services revenue, but a huge percent of that is driven by iPhone owners subscribing to things. Headline is misleadin

Great that they've been able to grow their services revenue, but a huge percent of that is driven by iPhone owners subscribing to things. Headline is misleading at best, if the iPhone were to suddenly lose their market to Android phones, most of that subscription revenue would dry up too. Music and Arcade I'd expect are vastly phone-based. TV might have the Apple TV as a significant subscriber base, and Music admittedly has an android client, but I'd be shocked if iPhone users weren't the majority of all of those subscriptions.

Despegar 7y ago
>Headline is misleading at best, if the iPhone were to suddenly lose their market to Android phones 10 years into the iPhone, it's safe to say this is never going to happen.
- tuna-piano 7y ago
  Downvoted because 10 years isn't that long but never is.
- Zenst 7y ago
  Nokia, Ericson, Blackberry... “Life moves pretty fast. If you don't stop and look around once in a while, you could miss it.” — Ferris
- melling 7y ago
  Hmmm..., I remember the Macintosh’s slow death to the PC in the late 1980’s and 1990s. I think you should probably look more closely at the iPhone’s global market share. Developers will support the larger, more profitable markets first. At some point, they’ll stop supporting the shrinking market. https://appleinsider.com/articles/19/07/31/iphones-global-marketshare-dips-to-101-amid-rise-of-samsung-chinese-brands https://appleinsider.com/articles/19/07/31/iphones-global-ma...
  - elygre 7y ago
    Developers will support multiple markets, the same way that car companies deliver cars with the steering wheel on the wrong (i.e. right) side of the car for those comparably small markets.
    - melling 7y ago
      I guess I wasn’t clear on this point. “At some point, they’ll stop supporting the shrinking market.” If the market is profitable, they’ll support it. However, as the Macintosh market shrank in the 1990s, for example, some developers fled. Also, great iPhone only apps will try to capture part of the larger Android market. As more revenue comes from Android, that’ll be their primary market. Read this story about Steve Jobs and Adobe. It might give you a better idea about what I’m trying to convey: https://www.businessinsider.com/the-real-reason-steve-jobs-wants-to-kill-adobe-2010-4 https://www.businessinsider.com/the-real-reason-steve-jobs-w...
  - rconti 7y ago
    Declining sales != declining install market share
    - ksec 7y ago
      The problem is No Newspaper actually write the word Declining Sales, they all use the word marketshares, where it means unit / revenue in the total market during a period of time. As a matter of fact Tim Cook mentioned in the Investor Q&A that iPhone User base has been growing in all of their Operating Segment. ( The word Operation was chosen likely because Apple doesn't actually operate in India, where it has declining usage ). The last reported Active iPhone users were 900M nearly 10 months ago. Apple are highly likely to reach 1B Active iPhone user sometime in 2020.
  - lunchables 7y ago
    Now look at the revenue per device that is generated for developers. https://themanifest.com/app-development/android-vs-ios-which-platform-build-your-app-first https://themanifest.com/app-development/android-vs-ios-which... Not only is it easier to build and maintain apps for iOS, people spend a lot more money on that platform. That Android market share is, in large part, driven by developing nations that aren't going to spend a lot of money on buying software on their mobile devices. That could certainly change in the future, but I just want to illustrate why just talking about the number of devices might not be the best indicator for which platform you should develop applications.
- wlesieutre 7y ago
  The biggest threat right now is prices. There are pretty good Android devices available for cheap (Pixel 3a, Nokia 2.2, etc). Not so much with iPhones. Rumor is they're dropping 3D Touch in 2019 models, and 2020 might see a screen size reduction on the smaller "X"-sized phone. So it's hopefully something they're working on. I'm sure they'll still be priced as premium devices and not competing directly against phones that cheap, but if they weren't 5x as expensive it would certainly help.
  - babypuncher 7y ago
    Apple has done a fairly good job of offering devices across the pricing spectrum. Their strategy has largely been to bump last years phone down a notch when the new models come out. You can buy a brand new iPhone 7 for $299. Budget Android phones can go lower, where Apple competes by selling refurbished phones.
    - Zenst 7y ago
      That they do and equally they also have a longer support life for their phones, allowing them to do this. Makes total sense marketing and cost wise by doing this unlike others who just move on year after year and artificially obsolete those products earlier within 2 years in most cases. Be interesting to see a price comparison based upon total expected lifetime and usability of a product and by that, once support/updates and with that, security updates stop. That product is dead beyond some fanbase support. So for the base consumer market that's 99.9% of the end-users, this means there investment can last longer. Which is another factor in why the second hand price of Apple phones is much more stable and depreciate in value more gradually than Android alternatives. THough there is also only so much tech you can cram into a phone and whilst the basic level of tech has risen and risen, it is worth noting that the mid-range android offerings are tech-wise, pretty darn good. Not saying we have reached peak tech or some form of leveling of, just yet. But the leaps - year upon year in the top end are smaller and smaller. Eventually we will get to the stage in which battery life becomes the factor again, after 2g phones leveled, that is what happened. Be case for smartphones and in some ranges, already starting to happen and an area of importance that will become more and more the main selling point in flagships, maybe not this year, but certainly soon.
- Data_Junkie 7y ago
  Absolutely will happen, not suddenly but ....
Scoundreller 7y ago
What I like about this problem is that it encourages Apple to continue supporting old hardware. When you upgrade, they want that old device to stay on-the-grid.
- deaps 7y ago
  I agree. Those older devices are still subscribing to some of your services, making them very valuable. I admit, however, that I get a new iphone each time one is released, and I've gotten the newest watch at its release also. My macbook, on the other hand, I do plan on keeping (and not upgrading) for _hopefully_ three to five years...unless of course my wife decides she wants my Air (to replace her ipad) - then I suppose a Pro is in my near future. :D
  - Scoundreller 7y ago
    You can do what you do because the old devices hold their value. Buying last generation Apple stuff is a safe decision, so the constant upgraders get good prices when they sell their old stuff. It’s also because spare parts are hard to come by, so Apple consumers cash in by selling their equipment as donors.
  - on_and_off 7y ago
    I will bite : what's the point of upgrading at each release cycle ? I am a mobile dev looking at my phone a lot .. and even in that case I am now changing phones every 2 to 3 years. The ecological waste is one of my main motivations, but tbh I don't really get much from a new phone. It goes so slightly faster and that's pretty much it.
    - deleted 7y ago
      [deleted]
    - jvagner 7y ago
      I held at the iPhone 7 until the XR. I didn't actually need to upgrade, but I knew I wouldn't upgrade to whatever they released this year if 5G and other nice hardware things were coming next year. The 7 is fine. Went to my partner, could've gone to my teenager, but he's not interested in a phone. The question I've asked myself a bunch of times in the past and which could be super relevant next year: if there's a 120hz iPad with 5G, I could absolutely live with that as my only device. I barely want a phone these days and work hard not to pull it out. I do use it for running though (heart rate band). Easily replaced by something else, but I definitely don't want to just buy gadgets on an annual basis anymore.
StreamBright 7y ago
Very true. It is also important to point out that the latest is innovations from Apple on mobile phones were alienating a non-trivial percentage of their customer base.
- scarface74 7y ago
  If that were the case, you should be able to see it in surveys showing iPhone users switching to Android en masse.
  - StreamBright 7y ago
    Matters on the definition of en masse. As anecdotal evidence many of my friends hold an older version of iPhone and refuse to purchase a newer model. I think 6s is the peak of mobile phones and for me there is nothing new that Apple could add. If they were keep producing 6s with better CPU or more memory over time I would keep purchasing that phone. Since they degraded the UX for me in the newer iPhones I won't buy it any more.
    - scarface74 7y ago
      There is no definition of “en masse” based on “anecdotal evidence”. All of the evidence from Apples financial statements when the X was introduced is that people did upgrade. But to your point, the iPhone 6s was when phones got good “enough”, it is still fast and the only reason I upgraded to the 8 plus was for the larger battery and screen.
handedness 7y ago
In addition, the Apple Watch still isn't viable to own without also owning an iPhone, and the AirPods are significantly less useful without an iOS device.
- wlesieutre 7y ago
  Clearly taking steps in that direction with watchOS 6 though. On-device app store, and the activity app lets you look at workout info and awards instead of forcing you to go to the iPhone app. On the face of it, that makes me wonder if they're aiming to expand it to Android users. But I suspect they'd need a real Android integrated app if they want to compete in that space.
craftyguy 7y ago
> Headline is misleading at best, if the iPhone were to suddenly lose their market to Android phones, most of that subscription revenue would dry up too. I think the title implies "iphone sales" and not the iphone as a device..

Despegar 7y ago

>Headline is misleading at best, if the iPhone were to suddenly lose their market to Android phones 10 years into the iPhone, it's safe to say this is never going to happen.

tuna-piano 7y ago
Downvoted because 10 years isn't that long but never is.
Zenst 7y ago
Nokia, Ericson, Blackberry... “Life moves pretty fast. If you don't stop and look around once in a while, you could miss it.” — Ferris
melling 7y ago
Hmmm..., I remember the Macintosh’s slow death to the PC in the late 1980’s and 1990s. I think you should probably look more closely at the iPhone’s global market share. Developers will support the larger, more profitable markets first. At some point, they’ll stop supporting the shrinking market. https://appleinsider.com/articles/19/07/31/iphones-global-marketshare-dips-to-101-amid-rise-of-samsung-chinese-brands https://appleinsider.com/articles/19/07/31/iphones-global-ma...
- elygre 7y ago
  Developers will support multiple markets, the same way that car companies deliver cars with the steering wheel on the wrong (i.e. right) side of the car for those comparably small markets.
  - melling 7y ago
    I guess I wasn’t clear on this point. “At some point, they’ll stop supporting the shrinking market.” If the market is profitable, they’ll support it. However, as the Macintosh market shrank in the 1990s, for example, some developers fled. Also, great iPhone only apps will try to capture part of the larger Android market. As more revenue comes from Android, that’ll be their primary market. Read this story about Steve Jobs and Adobe. It might give you a better idea about what I’m trying to convey: https://www.businessinsider.com/the-real-reason-steve-jobs-wants-to-kill-adobe-2010-4 https://www.businessinsider.com/the-real-reason-steve-jobs-w...
- rconti 7y ago
  Declining sales != declining install market share
  - ksec 7y ago
    The problem is No Newspaper actually write the word Declining Sales, they all use the word marketshares, where it means unit / revenue in the total market during a period of time. As a matter of fact Tim Cook mentioned in the Investor Q&A that iPhone User base has been growing in all of their Operating Segment. ( The word Operation was chosen likely because Apple doesn't actually operate in India, where it has declining usage ). The last reported Active iPhone users were 900M nearly 10 months ago. Apple are highly likely to reach 1B Active iPhone user sometime in 2020.
- lunchables 7y ago
  Now look at the revenue per device that is generated for developers. https://themanifest.com/app-development/android-vs-ios-which-platform-build-your-app-first https://themanifest.com/app-development/android-vs-ios-which... Not only is it easier to build and maintain apps for iOS, people spend a lot more money on that platform. That Android market share is, in large part, driven by developing nations that aren't going to spend a lot of money on buying software on their mobile devices. That could certainly change in the future, but I just want to illustrate why just talking about the number of devices might not be the best indicator for which platform you should develop applications.
wlesieutre 7y ago
The biggest threat right now is prices. There are pretty good Android devices available for cheap (Pixel 3a, Nokia 2.2, etc). Not so much with iPhones. Rumor is they're dropping 3D Touch in 2019 models, and 2020 might see a screen size reduction on the smaller "X"-sized phone. So it's hopefully something they're working on. I'm sure they'll still be priced as premium devices and not competing directly against phones that cheap, but if they weren't 5x as expensive it would certainly help.
- babypuncher 7y ago
  Apple has done a fairly good job of offering devices across the pricing spectrum. Their strategy has largely been to bump last years phone down a notch when the new models come out. You can buy a brand new iPhone 7 for $299. Budget Android phones can go lower, where Apple competes by selling refurbished phones.
  - Zenst 7y ago
    That they do and equally they also have a longer support life for their phones, allowing them to do this. Makes total sense marketing and cost wise by doing this unlike others who just move on year after year and artificially obsolete those products earlier within 2 years in most cases. Be interesting to see a price comparison based upon total expected lifetime and usability of a product and by that, once support/updates and with that, security updates stop. That product is dead beyond some fanbase support. So for the base consumer market that's 99.9% of the end-users, this means there investment can last longer. Which is another factor in why the second hand price of Apple phones is much more stable and depreciate in value more gradually than Android alternatives. THough there is also only so much tech you can cram into a phone and whilst the basic level of tech has risen and risen, it is worth noting that the mid-range android offerings are tech-wise, pretty darn good. Not saying we have reached peak tech or some form of leveling of, just yet. But the leaps - year upon year in the top end are smaller and smaller. Eventually we will get to the stage in which battery life becomes the factor again, after 2g phones leveled, that is what happened. Be case for smartphones and in some ranges, already starting to happen and an area of importance that will become more and more the main selling point in flagships, maybe not this year, but certainly soon.
Data_Junkie 7y ago
Absolutely will happen, not suddenly but ....

Scoundreller 7y ago

What I like about this problem is that it encourages Apple to continue supporting old hardware. When you upgrade, they want that old device to stay on-the-grid.

deaps 7y ago
I agree. Those older devices are still subscribing to some of your services, making them very valuable. I admit, however, that I get a new iphone each time one is released, and I've gotten the newest watch at its release also. My macbook, on the other hand, I do plan on keeping (and not upgrading) for _hopefully_ three to five years...unless of course my wife decides she wants my Air (to replace her ipad) - then I suppose a Pro is in my near future. :D
- Scoundreller 7y ago
  You can do what you do because the old devices hold their value. Buying last generation Apple stuff is a safe decision, so the constant upgraders get good prices when they sell their old stuff. It’s also because spare parts are hard to come by, so Apple consumers cash in by selling their equipment as donors.
- on_and_off 7y ago
  I will bite : what's the point of upgrading at each release cycle ? I am a mobile dev looking at my phone a lot .. and even in that case I am now changing phones every 2 to 3 years. The ecological waste is one of my main motivations, but tbh I don't really get much from a new phone. It goes so slightly faster and that's pretty much it.
  - deleted 7y ago
    [deleted]
  - jvagner 7y ago
    I held at the iPhone 7 until the XR. I didn't actually need to upgrade, but I knew I wouldn't upgrade to whatever they released this year if 5G and other nice hardware things were coming next year. The 7 is fine. Went to my partner, could've gone to my teenager, but he's not interested in a phone. The question I've asked myself a bunch of times in the past and which could be super relevant next year: if there's a 120hz iPad with 5G, I could absolutely live with that as my only device. I barely want a phone these days and work hard not to pull it out. I do use it for running though (heart rate band). Easily replaced by something else, but I definitely don't want to just buy gadgets on an annual basis anymore.

StreamBright 7y ago

Very true. It is also important to point out that the latest is innovations from Apple on mobile phones were alienating a non-trivial percentage of their customer base.

scarface74 7y ago
If that were the case, you should be able to see it in surveys showing iPhone users switching to Android en masse.
- StreamBright 7y ago
  Matters on the definition of en masse. As anecdotal evidence many of my friends hold an older version of iPhone and refuse to purchase a newer model. I think 6s is the peak of mobile phones and for me there is nothing new that Apple could add. If they were keep producing 6s with better CPU or more memory over time I would keep purchasing that phone. Since they degraded the UX for me in the newer iPhones I won't buy it any more.
  - scarface74 7y ago
    There is no definition of “en masse” based on “anecdotal evidence”. All of the evidence from Apples financial statements when the X was introduced is that people did upgrade. But to your point, the iPhone 6s was when phones got good “enough”, it is still fast and the only reason I upgraded to the 8 plus was for the larger battery and screen.

handedness 7y ago

In addition, the Apple Watch still isn't viable to own without also owning an iPhone, and the AirPods are significantly less useful without an iOS device.

wlesieutre 7y ago
Clearly taking steps in that direction with watchOS 6 though. On-device app store, and the activity app lets you look at workout info and awards instead of forcing you to go to the iPhone app. On the face of it, that makes me wonder if they're aiming to expand it to Android users. But I suspect they'd need a real Android integrated app if they want to compete in that space.

craftyguy 7y ago

> Headline is misleading at best, if the iPhone were to suddenly lose their market to Android phones, most of that subscription revenue would dry up too. I think the title implies "iphone sales" and not the iphone as a device..