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What's Apple's stance on this new subscription-based world?

- CHARLOTTE HENRY

For decades, Apple’s business model was almost exclusively based on one-off sales of high-cost products. Firstly Macs, then later iPods, iPhones, iPads and so on. Sure, the company wanted you to come back and upgrade your Mac, but that might only happen a few years down the line. Similarly, most people did not, and still do not, buy a new iPhone annually. In addition, Apple’s software products tended to require a significant one-off payment. It wasn’t that long ago they even charged users to upgrade to the latest Mac operating system!

Services have become an increasingly important part of Apple’s business in recent years, enabling the company to keeps generating revenue from customers who are not buying new Macs or iPhones. We’ve seen the introduction of Apple Music, Apple TV+ and iCloud storage, to name but a few. Furthermore, many of these have been consolidated into Apple One bundles, in which you pay to access a collection of services. Significantly, these services and bundles are offered on a subscription basis – monthly or annual payments. And it has worked. Results for the first quarter of 2023 showed that Apple generated a record-breaking $20.8 billion in revenue from services.