
Apple's Reinvention as a Services Company Starts for Real Monday - __ralston3
https://www.bloomberg.com/news/articles/2019-03-23/apple-s-reinvention-as-a-services-company-starts-for-real-monday
======
zmmmmm
One interesting question is how viable this can be if they continue their
strategy of differentiation through privacy. Doing "services" for people
intrinsically means knowing about them. What they watch, what they read, what
they listen to, what they need, who they are. The more you know, the better
you can "service" them. By pursuing this path they may quickly find themselves
sucked into a slipperly slope that puts them into conflict with the primary
identity they've tried to build up. You can see it already starting:

> divide up the revenue between developers based on how much time users spend
> playing their games

So they're going to spy on their users, huh? Of course, it's perfectly
innocent, but they will quickly find that with deeper metrics they can better
model what games to fund, etc etc. And before you know it they'll have a tab
in their account page just like Google with a list as long as your arm of all
the things they know about you.

~~~
blihp
Take the marketing pitch with a grain of salt. They've been keeping track of
aggregate usage data pretty much from the beginning. Also, they already have
to keep track of things like which apps/music/movies you have bought for
accounting purposes at the very least. For subscriptions they most likely also
have to track consumption (i.e. per access data) for royalty/revenue share
payments.

I remember a story from the tail end of the Jobs era when they were trying to
get their ad network going that their sales force was using as a selling point
to advertisers the fact that they had metrics such as how many minutes a day
users spent using various apps etc. They just don't share this data outside of
Apple and also (according to their public statements) don't access the private
data that you create.

~~~
toufka
I think society is okay with _some_ knowledge about individuals. And that
information is valuable. But it's still unclear where the line gets drawn that
becomes creepy and inverts its value. If you have the corporate structure and
policies to be able to draw an arbitrary line, you're likely better suited to
capture long-term value than if you have no line at all and willingly scrape
all data just to have it (ie, Facebook/Google).

So, Apple having aggregate data is interesting, because it's certainly a
monetization, but if they're truly honest and statistically aggregate numbers,
I think that might be a fantastic strategy.

~~~
blackflame7000
I think the line should be drawn at allowing 3rd parties to search user
profiles. I’m content with my content being one of billions on their servers
but i’m not ok with my content being indexible for any other reason than what
is required for the service to work.

Basically: Select * from AppleDB where userID=Me should never be allowed and
failure to prevent such access should result in heavy fines

------
ksec
I continue to wonder why they don't have or push iPhone as a Services ( The
iPhone Upgrade Programme ) and continue to rely on mostly Carriers for
Financing.

By offering iPhone up to a 4 years terms and bundled with AppleCare+ Thief and
Loss and iCloud Backup. With Optional Apple Music, Apple News Magazine, Apple
TV and Apple Game. All paid via an Apple Branded Credit Card within Apple Pay
backed by Goldman Sachs.

You could have the iPhone Services starting at ~$35/Month even for an iPhone
XS Max. If you add up all the other "Services" pack. That is roughly $75/month
for the Full Apple Experience.

~$40 to even $100 a month is affordable to a lot of people. And my guess this
could be part of the reason why Apple has been pushing the prices of iPhone.

There is another advantage to Apple, this strategy requires huge cash flow and
can not be easily copied by its competitor. Apple would be effectively trading
its immediate return of cash from selling product for long term customer lock
in.

~~~
pmalynin
Huh, I dont know where you are, but here in the States I got my iPhone through
0% financing (amortized over 2 years) program that allows you to get a new
phone every year and comes bundled with AppleCare+

~~~
ksec
The iPhone upgrade Programme which I presume is what you are referring to are
not popular outside US, and Apple barely advertise about it. ( Which is why I
said push in the original sentence ) And it is only available in selected
countries and under some condition.

~~~
toyg
I evaluated it here in UK and it just didn't make sense for me. It was very
expensive -- slightly less than buying a phone every year, but much more than
doing it every two-three years.

~~~
BillinghamJ
The iPhone Upgrade Program is exactly the same price over the full course of
the loan as just buying the phone with AppleCare. If you don't want the
AppleCare, "iPhone Payments" is exactly the same price overall as just buying
the iPhone. Both are 0% financing.

------
necubi
To me, the clear indication that they're serious about this transition to
services will be making them available on third-party devices. Android has
~55% market share in the US, and >80% globally. Roku has 35% of the smart TV
market (through both their dedicated devices and TV integrations), Apple has
~15%.

A video streaming service that's only available on iOS and Apple TV will be
inevitably niche, and no real competition for Netflix. This also means they
will likely have to pay a premium for content (and a _much_ larger amount per
user) as creators will prefer to be on platforms where more people will see
their work.

But ultimately, supporting Android and 3rd party streaming devices goes
against Apple's DNA. Apple still sees itself as a hardware company, and
software and services exist to give people reasons to buy their hardware.

~~~
andor
_" To me, the clear indication that they're serious about this transition to
services will be making them available on third-party devices"_

This just happened:

"Apple is putting iTunes on Samsung TVs" \-
[https://www.theverge.com/2019/1/6/18170797/samsung-2019-tvs-...](https://www.theverge.com/2019/1/6/18170797/samsung-2019-tvs-
itunes-support-airplay-2)

~~~
chipotle_coyote
That's a big—and new—step for Apple, and I'm sure it's connected to the video
service. They don't want it to be "Apple product exclusive," even if I'm sure
they'd rather you use Apple products to watch it.

But Apple hasn't ever been _quite_ as exclusive as they're painted to be when
it comes to peripherals and services. They've had iTunes on Windows for a very
long time (yes, it's kind of a trash fire, but it's still _there_ ), and that
was mostly to support the iPod. They have iCloud for Windows. Apple Music has
an Android app, is supported by Sonos and Amazon Alexa, and even has a web-
based API (no official "cloud player," but there's an open source one out
there which Apple knows about and is apparently okay with as long as it
doesn't use the word "Apple" in its name). And, of course, a lot of non-Apple
products can receive AirPlay, and they appear to have gotten fairly aggressive
in the last few months at moving AirPlay 2 into the third-party market.

So, Apple Services have been on third-party devices for years; they've just
historically been a lot less enthusiastic about it than companies like Spotify
and Amazon have been. I would expect to see them be way more enthusiastic from
here on.

~~~
AsyncAwait
I'd very much appreciate them making AirPlay an open protocol, enabling any
app to freely stream to AirPlay 2 hardware. Are they really benefiting that
much from the licensing deals vs the ecosystem it could spawn? They'd still be
producing most of the AurPlay receiver hardware people'd buy, just not the
transmitting end.

~~~
chipotle_coyote
Yeah, I think it would benefit them to make it open, also. It's really hard
for me to think of a protocol that benefits from being proprietary, especially
if you're trying to build an ecosystem around it.

(I think there's probably a good case along those lines for an open "Internet
of Things" protocol that would let any IoT device work with any voice
assistant or other controller -- probably by "publishing" a set of control
terms for it, like AppleScript dictionaries and whatever the ARexx equivalent
was on the Amiga -- but so far I'm not sure anyone's even proposed that.)

------
tyfon
> The company would collect these monthly fees, then divide up the revenue
> between developers based on how much time users spend playing their games

Sounds terrible for short indie games and good for long grindy games.

That's not a future I want for my gaming. Not that I am an apple customer in
the first place but hopefully this won't affect what is delivered on the other
platforms.

~~~
seanwilson
> Sounds terrible for short indie games and good for long grindy games.

What would be a good system to determine a fair amount between games when a
user is paying a fixed amount per month for all games?

You could ask for ratings (e.g. overall, originality) but these will be a lot
more nuanced than time spent. You could ask users what split between games
they think is fair (feels like a lot to ask especially if you're playing a lot
of games).

~~~
derefr
> You could ask users what split between games they think is fair (feels like
> a lot to ask especially if you're playing a lot of games).

Generate a pie chart based on playtimes, and then let the user adjust it to
match their subjective experience. Pre-bias the pie slices by multiplying the
default percentage cut by their rating of the game if they've given one.

~~~
duncanawoods
I think it could create some fascinating effects - probably not ones they
would want! E.g. players might punish someone like EA despite playing their
games or they might reward "aspirational" games they barely touch.

------
torstenvl
Apple has almost always been a services company. It's deeply sad that its
current leadership doesn't understand that. The only difference is that the
service Apple used to provide was a _friction-free experience_ on its
platform.

It feels like the current Apple doesn't think of product experience as a
service, with amortized costs built into the purchase price. In their eyes, at
least insofar as it seems from my perspective, the relationship stops as soon
as you decide to buy the product. Maybe a limited relationship exists
afterward, if you buy AppleCare. But they don't seem to care one whit if the
experience on their product sucks. Increasingly, Apple software argues with
you instead of adopting the philosophy of "it just works."

I'm extremely unlikely to pay Apple for a content service, given its current
track record of user-hostility.

------
liquidify
Their products are stagnating because they are less robust and more expensive.
The value just isn't there compared to _some_ of golden era hardware.
Obviously services can help them grow, but as user of apple laptops, I've felt
abandoned for quite a while now. Their growth in those fields are stagnating
because their price / quality ratio has reduced significantly.

------
whatshisface
> _This service will combine stories from newspapers, websites, and magazines
> into a new tab in the Apple News app on iPhones, iPads, and Macs._

> _Apple plans to charge about $10 a month._

Is it just me, or is there no way this could possibly be worth it? Hacker News
and Reddit already combine stories from newspapers and websites, and they do
it for free. I have a hard time believing that a managed source selected from
a few business partners could possibly be as valuable as a crowd-driven scan
across the entire internet.

~~~
Despegar
Hacker News and Reddit don't license content from the WSJ, which is why every
story has some guy in the comments with a link to outline.com that pirates the
article.

~~~
timbit42
So what?

------
bsaul
Funny how an announcement looks different depending on the slope of your
income. Apple reaching new markets vs apple « reinventing itself » is a
complete different story. Apple makes great devices and can leverage that to
conquer service subscription, but I don’t think anyone has been impressed by
apple online services or technologies on their own merits...

~~~
TheSoftwareGuy
>I don’t think anyone has been impressed by apple online services or
technologies on their own merits...

I disagree with that. iMessage is perhaps the best IM service out there.
iCloud works seeessly across devices, in a way im not sure any other cloud
storage solution does

~~~
adamson
I imagine it’s a lot easier to integrate your storage service with devices
when you have the freedom to change the storage APIs on said devices as you
see fit

~~~
yjftsjthsd-h
Never let it be said that vertical integration is without significant benefits
:-)

------
jedberg
They're gonna need a huge internal cultural shift if this is going to work.
Their entire company is built around hardware. Services are "just good
enough". No one buys an iPhone because of the services offered -- you buy the
services because you already have the iPhone and it works better than the
third party services. But I don't know anyone who adores the Apple services.

Or to put it another way, even if they offered the Apple services on non-apple
devices, I doubt many people who don't already have an Apple device would sign
up.

Their services make money in spite of how they work, not because of it. If
they want to compete on services, they actually have to make good services and
prioritize them internally.

~~~
tootie
Do they have any iconic software that wasn't appropriated from NeXT? Keynote
is pretty good. Everything else is either awful or basic.

~~~
verisimilidude
Pages was excellent during the 00s.

Then it wasn't.

They removed much of its power in one of the annual updates. I think it
happened in concert with the launch of their iOS version of Pages. Fortunately
many of those discarded concepts found their way into LibreOffice.

I know a lot of people feel the same way about Final Cut.

------
gjvc
Alan Kay once remarked “I don't know what Silicon Valley will do when it runs
out of Doug's ideas."

~~~
projectileboy
+1 - feels like a once great product company is now taking its strategy cues
from market analysts.

~~~
pavs
Last I checked, Apple is still the biggest company in the world in market cap.
They are also on the very top in terms of revenue and profit.

~~~
wayneftw
Both things can be true. Fortunes do rise and fall. Microsoft used to be the
800 pound Gorilla and now they're not.

Personally, I hope they waste a huge amount of money on this push and fail
miserably.

I also hope they lose their anti-trust case and get forced to play fair
because you certainly cannot hope to make any money in the smartphone app
market while ignoring Apple/iOS. They do have a monopoly on paying customers
as someone else in this thread pointed out.

------
yuchi
I had the hardest time parsing the title. For a moment I thought it was
talking about a new company, from apple, specialized in digital transformation
or similar (“Reinvention as a Service”)

~~~
joegahona
Which is why journalists and copy editors shouldn't remove "on" before every
occurrence of a weekday.

------
minimaxir
Of all the potential announcements, the gaming service is the most curious.
Like the just-announced Google Stadia, this 100% depends on the games offered,
and the cost of the service itself. $10/month for $5 premium iOS games (which
go on sale _very_ frequently) is a hard value proposition to other services
like Xbox Game Pass which have $60 games for the same monthly price.

If they do bundle it with News/Music, now that would be interesting.

------
mark_l_watson
I am reading a different Bloomberg article right now on this subject
[https://www.bloomberg.com/opinion/articles/2019-03-22/apple-...](https://www.bloomberg.com/opinion/articles/2019-03-22/apple-
s-new-services-come-with-built-in-conflicts)

I am 100% sure (infinitely sure!) that I will sign up for Apple’s service to
try it out and I am ‘almost sure’ that Apple will face a lot of regulatory and
legal challenges.

By personal preference I would like to see more open platforms and, off topic
for this conversation, a more distributed web.

I don’t think we will get there though. Years ago author William Gibson
probably ‘got it right’ in predicting what the future will be like:
corporations become all-powerful, governments become a joke if they exist at
all, and talented people align themself with a corporation as we self identify
now as the citizen of a country.

------
joegahona
> Apple News: This service will combine stories from newspapers, websites, and
> magazines into a new tab in the Apple News app on iPhones, iPads, and Macs.

I still don’t understand how this is any different from what’s happening in
the Apple News app right now, other than it will cost $10 per month starting
on Monday and is now free. Also, the Texture app requires that you _download_
issues of magazines, whereas magazines on Apple News are currently
instantaneous.

~~~
intopieces
Access to paywalled content for a single fee.

~~~
joegahona
Maybe... one other possibility here: [https://venturebeat.com/2019/03/14/how-
much-can-apple-charge...](https://venturebeat.com/2019/03/14/how-much-can-
apple-charge-for-video-news-and-bundled-services/)

> But there’s always the possibility that Apple starts with an “all you can
> eat monthly magazines” tier, then adds a pricier “all you can eat monthly
> magazines plus daily paywalled news” tier. This could give newspapers a way
> to make more money from the service — a reported sticking point to
> participation from the New York Times, Wall Street Journal, and Washington
> Post.

------
msoad
if Apple combines Music, News and TV subscriptions into one payment that's
competitive with sum of those subscriptions it's huge! I would probably drop
Spotify and get Apple Music if I can save me money and give me more access to
content. Uh, if it works with their Family Sharing plans it would be golden!

~~~
joegahona
I think that’s the key to this thing’s success. There’s no way enough people
are going to pay $120 per year for newspaper/magazine articles to make it
worthwhile for publishers or for users.

~~~
52-6F-62
AFAIK Texture was doing quite well.

~~~
joegahona
I’d be curious where you got that information. Everything I’ve read has
sounded simliar to this: [https://adage.com/article/digital/greedy-apple-half-
publishi...](https://adage.com/article/digital/greedy-apple-half-publishing-
subscription-sales/316619/)

> The skeptical publishers point to the original Texture—it didn't work--as
> proof the concept is shaky. The publishers say the revenue was meager, and
> the app itself sputtered through several incarnations before being sold off
> to Apple.

~~~
52-6F-62
Which publishers? Texture was owned by publishers.

In 2016 it was doing quite well (remember this is publishing money and not
tech VC money. Success in publishing does not look the same in dollars as
success does in SV tech): [https://nypost.com/2016/06/21/the-netflix-of-
magazines-is-ab...](https://nypost.com/2016/06/21/the-netflix-of-magazines-is-
about-to-get-a-lot-bigger/)

Apple bought Texture this time last year and then it spread they had planned
their own news platform. It's no surprise they were scaling back Texture as a
company.

------
Apocryphon
> The service will focus on original content, including TV shows and movies
> from producers such as Damien Chazelle, M. Night Shyamalan, and Oprah.

Makes one wonder if they will show a teaser for the Asimov's Foundation show.

------
GeekyBear
Apple has long provided free services to the people who buy Apple hardware
while selling the content that they have to pay to license from other content
owners (while taking a cut of the sale).

So far, I'm not seeing a change in their business model so much as im seeing a
change in how much focus is placed on the profitability of the latter.

If the rumors prove true and the streaming video content they produce in house
will be free to those with Apple devices, but content they license from others
costs money (with Apple taking a cut), this will definitely be Apple remaining
true to form.

------
FailMore
I think Apple should have been bolder a long time ago. It should be the case
that with Apple you get (near) global 4G/5G coverage on all their devices. So
you take your laptop out in Spain and _snap_ you’re online. Apples hardware is
their bread and butter. I think they need to view it as their amazon prime...
as in make a services ecosystem which means you want to stay using their
hardware instead of just adding paid subscription services to their existing
offering.

------
anongraddebt
Perhaps I'm overly critical, but I find most paywalled journalism (let alone
non-paywalled) to be low-quality. I had a subscription to The Information, and
while I initially found their journalism to be high-quality, I eventually
realized this perception was strongly shaped by my experience of pervasive
low-quality journalism elsewhere. I cancelled my subscription because while
The Information was better than pretty much anything else, it still didn't
seem high-quality (more moderate-quality).

Is there anything that surpasses the quality of The Economist in this
environment?*

*(not that The Economist is clearly non-relatively high-quality)

~~~
pembrook
Yea the information is probably the highest quality tech news out there (that
publishes with volume), but I agree it often falls into regurgitating the same
narratives everybody else is talking about with zero added value.

I’ve come to realize the only journalism worth paying for comes from
exceptional individual writers who are allowed to write about whatever they
find interesting (and have something unique to say). Ben Thompson’s
Stratechery fits into this category and is often the only person writing about
tech who brings unique thinking and new perspective to whatever the topic of
the day is.

------
amelius
It would be fun if the EU enforced something like the browser ballot screen,
giving users choice of content provider on Apple devices.

It also makes sense from an environmental perspective: why have two different
devices when you can view all content on one.

------
dfee
I might replace my FT sub with this. Only one datapoint though. But I’ll sub
day 1.

~~~
mrweasel
On the other hand there no way that I'd cancel my subscription to The
Economists paper edition for a digital only solution.

I suppose I'm not the target audience for Apple. Reading the news is something
I do away from digital device. It helps me practise focusing and it helps me
to relax.

------
patrickg_zill
They certainly haven't been focused on designing Macintosh hardware... Isn't
the Pro level version of their desktop offering, essentially unchanged for the
past 5 years?

------
bitxbit
This is basically the cable TV model for the modern age, no?

------
hartator
Still hoping for the ARM Macbook insteal of Netflix made by Apple.

------
onetimemanytime
Brilliant and the only thing left, short of another iPhone reinvention miracle
(not likely for a while.) Many of us have 10 year old PCs that do 100% of the
things we need, smartphones are going that way too. So milk the ecosystem.

------
gjvc
From the article "The company has only used the Steve Jobs Theater at its new
headquarters twice since it opened two years ago."

Something is in decline at Apple.

~~~
spiralganglion
They use it for internal events all the time.

------
Stratoscope
iPaas.

------
tyingq
Article is paywalled for me. Are these streaming services going to be usable
with non-Apple devices?

------
golemotron
Great. We are the product now.

------
ilovecaching
I wonder if now is a good time to short some Netflix stock.

~~~
kbenson
That depends on whether you think Netflix has successfully transitioned into a
network. They release a huge amount of original content now. _If I had any
apple devices_ , I would be more likely to drop HBONOW or Hulu than Netflix,
and since I pay for all three I'm sort of the target audience (except for the
whole no iPhone/iPad thing, which is also probably something they should think
about).

~~~
awad
Anecdote of one: I have all three as well. As the days go by, I find myself
questioning if Netflix is still worth it as I'm not necessarily a big fan of a
lot of their original content and think HBO seems to do a better job in
licensing the movies I'm interested in (to say nothing of their amazing
original content). I think at this point I only keep Netflix around out of
habit as it's something I share with family and will myself occasionally
indulge in some older licensed TV programs not on Hulu.

~~~
kbenson
HBO has some big-ticket items, but Netflix is more consistent in dropping new
series for me to try. It's still my go-to place for content since there's more
than I have time to watch. I just looked up their list of original content[1]
for refresh my mind, and quite a few were extremely good in my opinion.

\- House of Cards: I only got a little into the second season before I got
busy, but what I saw was high quality and interesting.

\- Orange is the new Black: My wife still loves this series

\- Stranger Things: An honest to god phenomenon. The second season was weaker
IMO, but I'm not sure how it could be as good as the first. That's a high bar
to hit.

\- The Crown: I caught a lot of it as my wife watched. Pretty good, even if a
blond Doctor Who was somewhat distracting.

\- A Series of Unfortunate Events: The kids liked this, as some of them are
going through the books.

\- Altered Carbon: Refreshingly good science fiction. Main character casting a
little odd, since it's more obvious now than it was when I was younger how odd
and slightly off-putting it is to cast someone with the physique of Arnold
Schwarzenegger as a science fiction lead. At the same time, it's now fitting
(or a trope) because of all the science fiction he helmed in the 1990's.

\- Lost in Space: Interesting, but ultimately spoiled slightly by the
contrived plot. Better writing and this would have been extremely good rather
than worth watching, but slightly disappointing.

\- The Haunting: A nice interweaving of stories, and creepy series. I liked
the ending. I have friends who didn't.

That's _just_ from the drama section of the list. There's plenty in the other
sections too, such as Maniac and Russian Dolls which I watched recently that
were good, and documentary section has a bunch of good things I've seen as
well. Some of he Marvel series' were pretty good too (season one of Jessica
Jones was excellent on so many levels).

That's a small fraction of what they released. Looking at the list now,
there's no way I would cancel Netflix before Hulu, and probably HBO also.
There's things I want to watch on those (for different reasons), but now that
I examine it, it's clear that I use and value what Netflix is giving me _way_
more than the other two.

1:
[https://en.wikipedia.org/wiki/List_of_original_programs_dist...](https://en.wikipedia.org/wiki/List_of_original_programs_distributed_by_Netflix)

~~~
rhino369
Netflix is much more bang for your buck. But I think HBO has a much better
signal to noise ratio. Also HBO has some all time classics, which netflix
lacks. I think Netflix has a lot of B+/A-, but it's missing an A or A+.

A lot of Netlix's new content is downright bad.

------
tanilama
But if I am not an iOS device owner, what incentive do I have to use Apple's
services? Currently I see none.

------
gonyea
Apple has completely lost its way under Cook that it’s now just rent seeking.
They’re just scrambling to fill a $$$ hole for their investors at this point.

Apple is incredibly bad at building services and has been for their entire
existence. They cannot multi-task and things will languish for 2-3 years at a
time.

------
true_tuna
Service from a company that presents two options “yes” and “[nag] me again
later” Fuck Apple. Any company that takes its users ability to say “no” is not
worth our attention.

------
jordache
haha stupid ass Apple's 2 factor authentication, provides the pin number on
the same machine that I'm authenticating on. These people do not know
services.

------
subdane
If Apple's going to be a services company now, wouldn't it be great if they
kept themselves honest (and their products great) by honoring a level playing
field for the services they compete with e.g. Spotify? Imagine if services
like iCloud, Pages and Mail were comparable to or better than the existing
product landscape? Apple's been holding themselves to too low a standard for
too long. Maps was a wakeup call for them, it'd be cool if they lit a fire
like that across the board for their products.

~~~
on_and_off
They have no incentive to keep themselves honest.

I have worked on a music streaming service for a while and our iOS app was a
big pain. We often had months long gaps where we were unable to get an update
published.

The good thing about Google being this unfocused is that they are unable to do
even think about doing the same and favor Play Music or whatever they are
calling it now .. again, they are not strong on focus.

I kinda hope that at some point publishing an app will be considered an
utility so it can't be so easily gamed by the platform owner.

