10 ms·

Apple’s New Era Has Begun

78 points by dankul1 6y ago

izacus 6y ago
I'm very worried that as services revenue becomes important, the aggressive rent-seeking behaviour from Apple will only increase and they'll start damaging user experience even more. Heck, iOS 14 booted with an Ad notification and in settings to buy their subscription services.
- peterwoerner 6y ago
  It feels, to me, that a duopoly is worse for the consumer than a monopoly. Monopolies behave better due to fear of regulation, but in a duopoly's justify their own bad behaviour based on the their counter-party.
  - newsclues 6y ago
    Both duopolies and monopolies can benefit from regulatory capture, and need not always fear regulation, especially if they can have undue influence on regulators.
- wsc981 6y ago
  The Apple music subscription advertising in the Music app is annoying as hell as well.
  - easton 6y ago
    You can disable this in Settings -> Music -> Show Apple Music if you want to.
- deleted 6y ago
  [deleted]
- dilap 6y ago
  It blows my mind that the top search result for an app is often an ad for a different app. You know that gazillions of unsophisticated users are downloading the wrong app as a result and having a worse experience. (It's easy to do as a sophisticated user if you're not paying attention!) Apple directly selling out UX for $ is certainly not an optimistic sign. I do wonder at a much broader level if there's some way to structure society to bring the motivation & focus that young companies give us w/o the inevitable slide to evil that capitalism and investors demand.
- gwright 6y ago
  > the aggressive rent-seeking behaviour from Apple Can you clarify what you mean here? I associate the term "rent-seeking" with efforts to manipulate public policies in a way that advantages the company specifically over other competitors. You seem to be talking about an ecosystem "lock-in" approach, which is something different than "rent-seeking".
  - vlovich123 6y ago
    The Wikipedia definition is probably closest: > rent-seeking means seeking to increase one's share of existing wealth without creating new wealth I think the distinction is probably phrased as seeking to increase one’s share of wealth without providing a commensurate amount of value in return.
- Cthulhu_ 6y ago
  At least some of their services have competition - netflix, spotify are both bigger (I believe?) than Apple's competition. It could drop quickly for Spotify if Apple decides to ban them from the app store like they did Fortnite, which will in part depend on Spotify trying to get around the App Store fees like Epic did. And things could change drastically if the lawsuits currently springing up against Apple's fees and monopolies end up successful. But then, it'll likely mean "Apple makes less profit" than "Apple is destroyed". Remember, Apple has nearly $200 billion in cash, as well as a 20% profit margin. They pump a lot of money into R&D (nearly $20 billion a year, still climbing every year). Basically they're very secure, financially speaking.
- r00fus 6y ago
  Internal advertising of their services is not "agressive rent-seeking". Lets come up with valid examples to compare/contrast.
- musicale 6y ago
  > iOS 14 booted with an Ad notification and in settings to buy their subscription services. I really hate Apple's spammy advertising; it seriously damages the user experience (not to mention Apple's reputation and brand) for no good reason. Obviously spammy and obnoxious advertising works to some extent or companies wouldn't do it - but user goodwill takes years to build up and probably shouldn't be sacrificed on the altar of short-term monetization. If Apple's services are actually good, then users shouldn't need to be spammed with obnoxious alerts and preinstalled adware. It should simply be an optional (and opt-in) add-on that's included in the box like a "free" code for a year of service if you want - and I think they do that already for Apple TV+ and Apple Arcade. If it's worth it, people will renew. Word of mouth and regular non-spammy advertising should do the rest.
Traster 6y ago
"Apple is moving to services" is hardly a ground-breaking take. The problem for Apple isn't that their device sales are down, it's that their pivot to services based revenue is not going well. Apple have taken their absolute dominance in selling music and moved to middle of the pack in music streaming squeezed between Spotify and Youtube. They're late to TV streaming and somehow, despite being incredibly closely linked to Disney have failed to tie up a deal. Apple's Siri is distinctly second tier, losing them both for Apple Music, but also potential shopping via smart assistant. iCloud comes across as Apple nickle and dime-ing their customers, insisting you need to back up your phone but providing laughable amounts of storage for free - and then becoming nagware. Then you have Apple One - Apple's bundle. Which offers a whole selection truly terrible deals. Did you know you can pay $15 per month for enough iCloud storage to still not be able to back up your iPhone. For $20 a month your whole family can share less storage space than each of you probably needs individually. Double that price with practically no other benefits just to be able to actually use iCloud for a macbook. What do you think when you think Apple? iPads, iPhones, Macbooks. So obviously, their headline bundle includes literally none of those products even as an option. Oh and AppleCare - the only thing people actually do subscribe to... not included either. Not forgetting the handful of absolutely forgetable bundled products, Apple Arcade, Apple News+ and Apple Fitness+ (which doesn't exist). Filling your bundle full of rubbish that no one uses isn't a good strategic move. If you had a bundle of 20 things it would be fine, but a bundle of 6 things, 2 of which should be bundled with hardware, 2 of which are mediocre, is just not compelling. Finally you've got the Appstore. Apple is getting absolutely hammered on their 30% fee. At this point it looks almost certain that they'll either change their fee structure or face regulatory action. So yes, fine, we can talk about Apple's move from products to services. But if we're going to do that we need to do it in the context of "Apple is failing to move from products to services". There is no clear path for Apple on the services side. If Apple is a services company why isn't FaceTime adding $100Bn of market cap to Apple's value as a competitor to Zoom?
- crazygringo 6y ago
  You seem to be looking at it backwards. You're complaining mostly about Apple charging too much for not enough. But since people are signing up for these things in droves, Apple is making $$$$, which means Apple's strategy is succeeding. Apple's services strategy pays off when it makes a lot of profit, not when when you feel like you're getting amazing deals on everything. Apple's never been a budget-product company, it's always been high-end.
cblconfederate 6y ago
Despite our relentless effort to make our webpages and apps heavier and bulkier and slower for no reason, people are not buying new phones? I m at a loss here what else can we do. Perhaps install cryptominers
- ReptileMan 6y ago
  Making devices unrepearable ia a start. Drm ing whatever parts are replacable helps too.
nicoburns 6y ago
Apple has also been steadily increasing the prices of new iPhones. I don't know if this is enough for them to make up the difference on lower sales, but it's surely a factor in how many people buy iphones. I also really don't really understand the attitude that this is a problem. Apple could half their current sales numbers and still have a massively profitable business that most people could only dream of. As long as that lower rate was sustained then there isn't really a problem for the company.
- sempron64 6y ago
  Counterpoint, I’m a die-hard 10-year Android user and I bought an SE when the new one came put because it was reasonably priced. Still considering going back to Android since I miss various things like the back button, but the promising hardware at a reasonable price got me. I’m now using my phone for mobile payments, something I was never comfortable with on Android.
- jrsj 6y ago
  They have more expensive high end options but they've also expanded lower priced devices as well. Even ignoring the SE the new iPhone 12 Mini is a flagship device at a $699 price point thats very difficult for Android manufacturers to compete with -- despite the fact that Apple has much higher margins on its devices than they do.
  - nicoburns 6y ago
    $699 does indeed seem quite reasonable (or at least comparable with how much iPhones have always cost).
  - dont__panic 6y ago
    The phone is $729 in reality, because you either purchase it for $729 unlocked or for $699 on a plan and then fork over $30 to your phone provider as an "upgrade fee".
    - Schiendelman 6y ago
agumonkey 6y ago
Services reminds me so much of IBM. Apple should make a blockchain and partner with old banks to swipe the new trend.
CivBase 6y ago
> Then there’s an ever-growing suite of services that Apple conveniently puts in front of iPhone holders. I wonder just how popular many of those services would be if Apple competed with them on a level playing field instead of leveraging their control of the hardware and operating system to advantage their own services.
crb002 6y ago
Disagree. They have sucked up TSMC's low nm bandwidth. They are becoming the Intel of ARM, and it wouldn't surprise me if they become a hyperscaler as a service.
- deleted 6y ago
  [deleted]
cryptica 6y ago
AAPL is not a company anymore, it's a store of value like Bitcoin. Except it's centralized and relies on countless intermediaries. It doesn't matter how many phones they sell. The only thing that counts is how much of all newly printed fiat currencies their stock can capture from investors and if the next generation will agree to continue the ponzi.
jrsj 6y ago
This is basically the most optimistic outlook to have, but I think there's a real case to be made for this: With ARM Macs we could also potentially see 5G connected laptops which could be purchased 0 down through a cell carrier + the potential for iPad to be running containerized Mac apps within a couple years, making them a viable computer at less than $500 that offers a vastly superior experience to anything else at that price point. Imo this could lead to significant market share gains and its not impossible that Apple could end up with > 50% market share across all device categories in the U.S. within a decade, with all of those devices being profitable AND pushing you to use their services.
- woah 6y ago
  Is there something about ARM chips which makes them more well suited to being used in a device that has a cellular modem?
  - vlovich123 6y ago
    Cheaper because it’s something that’s done on a daily basis in the mobile industry. Not technically difficult but Apple’s entire stack aside from laptop/desktop is ARM. That means everything from drivers to silicon integration is “done” for ARM. You’ve still maybe got system integration differences you need to spend engineering cycles on since it’s a different form factor but everywhere else you’re sharing costs.
  - r00fus 6y ago
    It could be that was the entire goal with Intel's 5G efforts (that failed). The licensing of the 5G chip is probably what's driving this - and that's on Qualcomm.
ProAm 6y ago
I miss the days of telling my relatives just go buy a Mac because I was tired of providing PC support for them.
- derwiki 6y ago
  What do you tell them now?
  - hi5eyes 6y ago
    "get an ipad or a chromebook"
    - mooman219 6y ago
      I got a Chromebook for a relative to replace their anemic Windows netbook and it was a large improvement day to day, requiring less support. I use Windows personally, but I have no idea how the low technical knowledge parts of society have managed to survive.
  - freetonik 6y ago
    Not OP, but today I'm telling them to re-consider the need for a tech product in general.
  - ProAm 6y ago
    It depends, usually a chromebook because all they do is email, facebook, web browse, zoom. It is someone that actually uses a computer it's one of the user friendlier versions of linux. Worst case is Win10
TYPE_FASTER 6y ago
App store regulation would be industry-wide. They've been targeted by Epic and others, but I'm assuming that's because the number of devices and market share make them the first target. It would be interesting to propose alternatives that support running unsigned or alternatively signed binaries. For example, if a Windows user is tricked into running malware, how do they address the issue with Microsoft? Are there ways consumers can get a live person to connect to their PC and walk them through fixing the issue? Or is that an additional fee? If we tell all device manufacturers, including game console vendors, to add a software switch that allows us to install our own binaries or point to any repo we want, we should expect vendors to provide basically the same experience.
artembugara 6y ago
I strongly agree that the main competitor of new iPhones are old iPhones. But, people still use iPhones. I use a 1+ year old iPhone XR, and it is more than enough for me. It is my first iPhone, and I am 100% satisfied with it. As long as consumers have iPhones (no matter which ones) Apple will make money on services.
deleted 6y ago
[deleted]
kumarvvr 6y ago
Their Apple TV+,or whatever its called, the competitor to Netflix, is underwhelming. In India, it costs about 2 USD a month. It has tied up with various regional media houses to cater their content,but the catch is you have to pay them additional monthly charges, to access them through Apples service. Their originals are quite few. For a company that has so deep pockets, one would have expected atleast a few months worth of shows to watch while their catalog is refreshed. Disappointing. Apple Music, while good, is just one of the competitors. Amazon Prime music and Spotify and a few others, are equally good. Music content, in a world where streaming is fast becoming the norm, will eventually spread to all services. So eventually Apple Music becomes a commodity, competing only on price. Something Apple never does. And content exclusivity aint gonna work with the biggest names. Lady Gaga sure as hell wont agree to stream her songs exclusively on Apple. The only strength is a large base and integration with existing services, but in that case too, the profit margins are not as great as hardware.
- musicale 6y ago
  Apple Arcade, however, seems surprisingly good.

78 points by dankul1 6y ago

I'm very worried that as services revenue becomes important, the aggressive rent-seeking behaviour from Apple will only increase and they'll start damaging user experience even more. Heck, iOS 14 booted with an Ad notification and in settings to buy their subscription services.

peterwoerner 6y ago
It feels, to me, that a duopoly is worse for the consumer than a monopoly. Monopolies behave better due to fear of regulation, but in a duopoly's justify their own bad behaviour based on the their counter-party.
- newsclues 6y ago
  Both duopolies and monopolies can benefit from regulatory capture, and need not always fear regulation, especially if they can have undue influence on regulators.
wsc981 6y ago
The Apple music subscription advertising in the Music app is annoying as hell as well.
- easton 6y ago
  You can disable this in Settings -> Music -> Show Apple Music if you want to.
deleted 6y ago
[deleted]
dilap 6y ago
It blows my mind that the top search result for an app is often an ad for a different app. You know that gazillions of unsophisticated users are downloading the wrong app as a result and having a worse experience. (It's easy to do as a sophisticated user if you're not paying attention!) Apple directly selling out UX for $ is certainly not an optimistic sign. I do wonder at a much broader level if there's some way to structure society to bring the motivation & focus that young companies give us w/o the inevitable slide to evil that capitalism and investors demand.
gwright 6y ago
> the aggressive rent-seeking behaviour from Apple Can you clarify what you mean here? I associate the term "rent-seeking" with efforts to manipulate public policies in a way that advantages the company specifically over other competitors. You seem to be talking about an ecosystem "lock-in" approach, which is something different than "rent-seeking".
- vlovich123 6y ago
  The Wikipedia definition is probably closest: > rent-seeking means seeking to increase one's share of existing wealth without creating new wealth I think the distinction is probably phrased as seeking to increase one’s share of wealth without providing a commensurate amount of value in return.
Cthulhu_ 6y ago
At least some of their services have competition - netflix, spotify are both bigger (I believe?) than Apple's competition. It could drop quickly for Spotify if Apple decides to ban them from the app store like they did Fortnite, which will in part depend on Spotify trying to get around the App Store fees like Epic did. And things could change drastically if the lawsuits currently springing up against Apple's fees and monopolies end up successful. But then, it'll likely mean "Apple makes less profit" than "Apple is destroyed". Remember, Apple has nearly $200 billion in cash, as well as a 20% profit margin. They pump a lot of money into R&D (nearly $20 billion a year, still climbing every year). Basically they're very secure, financially speaking.
r00fus 6y ago
Internal advertising of their services is not "agressive rent-seeking". Lets come up with valid examples to compare/contrast.
musicale 6y ago
> iOS 14 booted with an Ad notification and in settings to buy their subscription services. I really hate Apple's spammy advertising; it seriously damages the user experience (not to mention Apple's reputation and brand) for no good reason. Obviously spammy and obnoxious advertising works to some extent or companies wouldn't do it - but user goodwill takes years to build up and probably shouldn't be sacrificed on the altar of short-term monetization. If Apple's services are actually good, then users shouldn't need to be spammed with obnoxious alerts and preinstalled adware. It should simply be an optional (and opt-in) add-on that's included in the box like a "free" code for a year of service if you want - and I think they do that already for Apple TV+ and Apple Arcade. If it's worth it, people will renew. Word of mouth and regular non-spammy advertising should do the rest.

Traster 6y ago

"Apple is moving to services" is hardly a ground-breaking take. The problem for Apple isn't that their device sales are down, it's that their pivot to services based revenue is not going well. Apple have taken their absolute dominance in selling music and moved to middle of the pack in music streaming squeezed between Spotify and Youtube. They're late to TV streaming and somehow, despite being incredibly closely linked to Disney have failed to tie up a deal. Apple's Siri is distinctly second tier, losing them both for Apple Music, but also potential shopping via smart assistant. iCloud comes across as Apple nickle and dime-ing their customers, insisting you need to back up your phone but providing laughable amounts of storage for free - and then becoming nagware. Then you have Apple One - Apple's bundle. Which offers a whole selection truly terrible deals. Did you know you can pay $15 per month for enough iCloud storage to still not be able to back up your iPhone. For $20 a month your whole family can share less storage space than each of you probably needs individually. Double that price with practically no other benefits just to be able to actually use iCloud for a macbook. What do you think when you think Apple? iPads, iPhones, Macbooks. So obviously, their headline bundle includes literally none of those products even as an option. Oh and AppleCare - the only thing people actually do subscribe to... not included either. Not forgetting the handful of absolutely forgetable bundled products, Apple Arcade, Apple News+ and Apple Fitness+ (which doesn't exist). Filling your bundle full of rubbish that no one uses isn't a good strategic move. If you had a bundle of 20 things it would be fine, but a bundle of 6 things, 2 of which should be bundled with hardware, 2 of which are mediocre, is just not compelling. Finally you've got the Appstore. Apple is getting absolutely hammered on their 30% fee. At this point it looks almost certain that they'll either change their fee structure or face regulatory action. So yes, fine, we can talk about Apple's move from products to services. But if we're going to do that we need to do it in the context of "Apple is failing to move from products to services". There is no clear path for Apple on the services side. If Apple is a services company why isn't FaceTime adding $100Bn of market cap to Apple's value as a competitor to Zoom?

crazygringo 6y ago
You seem to be looking at it backwards. You're complaining mostly about Apple charging too much for not enough. But since people are signing up for these things in droves, Apple is making $$$$, which means Apple's strategy is succeeding. Apple's services strategy pays off when it makes a lot of profit, not when when you feel like you're getting amazing deals on everything. Apple's never been a budget-product company, it's always been high-end.

cblconfederate 6y ago

Despite our relentless effort to make our webpages and apps heavier and bulkier and slower for no reason, people are not buying new phones? I m at a loss here what else can we do. Perhaps install cryptominers

ReptileMan 6y ago
Making devices unrepearable ia a start. Drm ing whatever parts are replacable helps too.

nicoburns 6y ago

Apple has also been steadily increasing the prices of new iPhones. I don't know if this is enough for them to make up the difference on lower sales, but it's surely a factor in how many people buy iphones. I also really don't really understand the attitude that this is a problem. Apple could half their current sales numbers and still have a massively profitable business that most people could only dream of. As long as that lower rate was sustained then there isn't really a problem for the company.

sempron64 6y ago
Counterpoint, I’m a die-hard 10-year Android user and I bought an SE when the new one came put because it was reasonably priced. Still considering going back to Android since I miss various things like the back button, but the promising hardware at a reasonable price got me. I’m now using my phone for mobile payments, something I was never comfortable with on Android.
jrsj 6y ago
They have more expensive high end options but they've also expanded lower priced devices as well. Even ignoring the SE the new iPhone 12 Mini is a flagship device at a $699 price point thats very difficult for Android manufacturers to compete with -- despite the fact that Apple has much higher margins on its devices than they do.
- nicoburns 6y ago
  $699 does indeed seem quite reasonable (or at least comparable with how much iPhones have always cost).
- dont__panic 6y ago
  The phone is $729 in reality, because you either purchase it for $729 unlocked or for $699 on a plan and then fork over $30 to your phone provider as an "upgrade fee".
  - Schiendelman 6y ago

agumonkey 6y ago

Services reminds me so much of IBM. Apple should make a blockchain and partner with old banks to swipe the new trend.

CivBase 6y ago

> Then there’s an ever-growing suite of services that Apple conveniently puts in front of iPhone holders. I wonder just how popular many of those services would be if Apple competed with them on a level playing field instead of leveraging their control of the hardware and operating system to advantage their own services.

crb002 6y ago

Disagree. They have sucked up TSMC's low nm bandwidth. They are becoming the Intel of ARM, and it wouldn't surprise me if they become a hyperscaler as a service.

deleted 6y ago
[deleted]

cryptica 6y ago

AAPL is not a company anymore, it's a store of value like Bitcoin. Except it's centralized and relies on countless intermediaries. It doesn't matter how many phones they sell. The only thing that counts is how much of all newly printed fiat currencies their stock can capture from investors and if the next generation will agree to continue the ponzi.

jrsj 6y ago

This is basically the most optimistic outlook to have, but I think there's a real case to be made for this: With ARM Macs we could also potentially see 5G connected laptops which could be purchased 0 down through a cell carrier + the potential for iPad to be running containerized Mac apps within a couple years, making them a viable computer at less than $500 that offers a vastly superior experience to anything else at that price point. Imo this could lead to significant market share gains and its not impossible that Apple could end up with > 50% market share across all device categories in the U.S. within a decade, with all of those devices being profitable AND pushing you to use their services.

woah 6y ago
Is there something about ARM chips which makes them more well suited to being used in a device that has a cellular modem?
- vlovich123 6y ago
  Cheaper because it’s something that’s done on a daily basis in the mobile industry. Not technically difficult but Apple’s entire stack aside from laptop/desktop is ARM. That means everything from drivers to silicon integration is “done” for ARM. You’ve still maybe got system integration differences you need to spend engineering cycles on since it’s a different form factor but everywhere else you’re sharing costs.
- r00fus 6y ago
  It could be that was the entire goal with Intel's 5G efforts (that failed). The licensing of the 5G chip is probably what's driving this - and that's on Qualcomm.

ProAm 6y ago

I miss the days of telling my relatives just go buy a Mac because I was tired of providing PC support for them.

derwiki 6y ago
What do you tell them now?
- hi5eyes 6y ago
  "get an ipad or a chromebook"
  - mooman219 6y ago
    I got a Chromebook for a relative to replace their anemic Windows netbook and it was a large improvement day to day, requiring less support. I use Windows personally, but I have no idea how the low technical knowledge parts of society have managed to survive.
- freetonik 6y ago
  Not OP, but today I'm telling them to re-consider the need for a tech product in general.
- ProAm 6y ago
  It depends, usually a chromebook because all they do is email, facebook, web browse, zoom. It is someone that actually uses a computer it's one of the user friendlier versions of linux. Worst case is Win10

TYPE_FASTER 6y ago

App store regulation would be industry-wide. They've been targeted by Epic and others, but I'm assuming that's because the number of devices and market share make them the first target. It would be interesting to propose alternatives that support running unsigned or alternatively signed binaries. For example, if a Windows user is tricked into running malware, how do they address the issue with Microsoft? Are there ways consumers can get a live person to connect to their PC and walk them through fixing the issue? Or is that an additional fee? If we tell all device manufacturers, including game console vendors, to add a software switch that allows us to install our own binaries or point to any repo we want, we should expect vendors to provide basically the same experience.

artembugara 6y ago

I strongly agree that the main competitor of new iPhones are old iPhones. But, people still use iPhones. I use a 1+ year old iPhone XR, and it is more than enough for me. It is my first iPhone, and I am 100% satisfied with it. As long as consumers have iPhones (no matter which ones) Apple will make money on services.

deleted 6y ago

[deleted]

kumarvvr 6y ago

Their Apple TV+,or whatever its called, the competitor to Netflix, is underwhelming. In India, it costs about 2 USD a month. It has tied up with various regional media houses to cater their content,but the catch is you have to pay them additional monthly charges, to access them through Apples service. Their originals are quite few. For a company that has so deep pockets, one would have expected atleast a few months worth of shows to watch while their catalog is refreshed. Disappointing. Apple Music, while good, is just one of the competitors. Amazon Prime music and Spotify and a few others, are equally good. Music content, in a world where streaming is fast becoming the norm, will eventually spread to all services. So eventually Apple Music becomes a commodity, competing only on price. Something Apple never does. And content exclusivity aint gonna work with the biggest names. Lady Gaga sure as hell wont agree to stream her songs exclusively on Apple. The only strength is a large base and integration with existing services, but in that case too, the profit margins are not as great as hardware.

musicale 6y ago
Apple Arcade, however, seems surprisingly good.