Apple digital transformation toward service company. For those who had watched Apple September 10 event, will know for new ipad 7th generation, smart watch 5 series, iphone 11 and new “pro” range of iphone 11 Pro, together with Arcade and Apple TV+ subscription at unbelieved USD 4.99 per month each, and free 1 year for any customer who bought new Apple product.
Despite keep losing the market share for the smartphone, without doubt it end to end eco system is complete. Apple remain strong on the ipad and Smart watch, where the rest of player no really can compete for the value position.
With the pushing from hardware and software to service, even encourage customers to had free 1 year of subscription, and low price for 4.99 USD per month for arcade or TV+ subscription, that mean Apple is determined digital transformation (DT) and become service company. If you add in recent Apple Card, they are actually enter into different traditional market and attempt to compete with them on those areas. TV+ is compete with Netflix, and newcomer like Disney also enter this market. Credit card is traditional bank sector business. Arcade subscription, where the sector used to be dominance by core game console and selling base on per game purchase or subscription basis. Those will challenge existing player and worth to see how Apple can make their digital transformation.
One thing worth to be noted, they had huge installed based for the iphone, ipad, smart watches etc. If they can “milking” existing installed based willing to paid continuous for additional USD 5 to USD20 per user per month, that aggregate will be seizable service revenue. For successful implementation of this new strategy, we can expect for loyalty, and harder for platform shift, since for the shift had intangible shifting cost, that no attached to the product hardware. It no more matter for whether you need keep innovative and be the best product for each round of hardware refreshment, that is a smart move, hope everyone learn the lesson from it.
A lot of companies keep complaining about market competition, but once you think out of the box, out of the existing business, out of the existing industry, and focus on what can you build and meet the unmet needs, it always opportunity anywhere.
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