The role of services at Apple
When I survey my students’ for their favorite brand, Apple or Nike usually come out on top. Most of my students have iPhones and Apple laptops. And next month we will see the launch of the iPhone 16 (see announcement on X to the left).
What I find interesting about Apple’s recent strategy has been its move away from goods and toward services. While we think about Apple’s tech hardware, the iPhone has typically provided more than half of Apple’s annual revenue, the company has found its services (Music, TV+, iCloud, Fitness+, News+, and more) are delivering much bigger profit margins for the company. As recently reported by Sherwood, services profit margins are 75% compared to 37% for its hardware products. That is a huge difference.
This is causing Apple to adjust its product line (Chapter 8) to include more services. Announced and soon to be launched is Apple Intelligence, which will integrate Apple’s own on-board AI system into its hardware products (Chapter 8 also talks about goods that integrate technology). These are frequently priced as bundled subscriptions, which assures ongoing revenue (Chapter 17) and better customer lifetime value (Chapter 2).
As you can see here, there are plenty of recent Apple examples that you can integrate into your upcoming lectures. All should keep your students’ interests.