New chart shows Apple's focus away from the iPhone

New chart shows Apple's focus away from the iPhone
It's no secret that Apple is dealing with struggling iPhone sales, and is looking to the future. While there is a strong sense that the next big thing to come out of Cupertino will be AR glasses, it seems that for the time being the company continues to focus on its services unit. As Apple CEO Tim Cook reiterated during Friday's stockholder's meeting, the company is on track to reach its target of $50 billion in services revenue by 2020. That would double the $25 billion that the division grossed in 2016.

According to Thinknum (via MacRumors), from 2016 up until the third quarter 2018, Apple's job listings focused on hardware engineering. That quarter saw Apple post more job openings for software than for hardware. And as February 2019 came to an end, software engineering once again was the focus of Apple's job listings.

With a global active base of 900 million iPhone units, it makes sense for Apple to now focus on a way to squeeze more money out of those who have already purchased and use an iPhone. And the businesses covered under Apple's services umbrella are all software intensive. This includes the App Store, Apple Pay, AppleCare, Apple Music, iTunes and more.


Apple is looking to add more subscription services to pump up services revenue. It plans to announce an Apple News subscription plan that will include the Texture magazine service that Apple acquired last year. This is expected to be unveiled at Apple's next press event, which will most likely take place on March 25th. Later this year, the company is also expected to launch a video streaming service that would be a competitor to Netflix.

Until Apple does release its next big device, the services business will be called on to do some very heavy lifting. It already is Apple's second largest contributor to revenue, and the most profitable segment of the company.

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32 Comments

1. CreeDiddy

Posts: 2134; Member since: Nov 04, 2011

Smartest move by any smartphone company! You will never win the units sold race forever. Apple has realized their goal and where they are capped at is 200 million sold per year. This number is sick especially since they have the highest ASP by nearly 3 times their closest competitors. Ideally you would like to grow units substantially year to year, but this isn’t going to happen. The biggest issue for Samsung is that they came out with a great phone in the S10. This will mean their growth numbers will become substantially flat for the next few years as many will hold off to upgrade until 2021-2022. When you make a great product expect an 2-3 year upgrade cycle. Apple’s ability to tap into their 900 million customers is a smart move.

2. DarthJarJar

Posts: 51; Member since: Feb 01, 2018

Or it could be because phones are becoming more expensive and we as consumers are now hanging on to phones for as long as possible. That doesn’t mean they’re reliable, I see customers with issues on their phones and as long as it makes phone calls “it still works”

3. sgodsell

Posts: 7030; Member since: Mar 16, 2013

CreeDiddy is blinded by his love of everything Apple. Talking about ASP is only good for investors or Apple themselves, customers don't a crap about, unless it means a lower price for them. So higher and higher means sad customers, or better yet, reduced sales. Like Apple currently has. DarthJarJar it most definitely has to do with price, and subsidies. Which the vast majority of the world smartphones are not subsidized. Why do you Apple recently negotiated (January 2019) a deal with some of China's largest carriers (China Mobile for one) to offer deals to Chinese customers. That one carrier alone is the largest in the world with over 750 million customers. Apple is expecting to gain 10 to 40 million new customers from this deal. However they are selling iPhone 5S and iPhone SE devices. Good luck with that Apple. :-( That is not a deal in my opinion. If Apple tries to come out with lower speced iPhones with a lower price, then it will cannibalize their own higher end iPhone devices. It why Apple only made 3 new, and larger iPhones. If the XR was an Android smartphone, then that device would even be able to get $500 for a brand new XR. You see Apple knows this because Apple knows they only make these 3 new iPhone devices, at these prices. You don't like it, then too bad. Apple is the type that forces it's customers to switch things up. You want to use TouchID still, too bad. Android OEMs can't do that. That is why they have the best finger print scanners in the world right now. They are more secure than Apple's FaceID. Especially the new S10 ultrasonic sensor. Even LG with their new time of flight camera is better than Apple's current FaceID setup. I guess that is why Apple is going with a time of flight camera, maybe LG is going to sell Apple those new cameras. Anyone and everyone in the tech industry knows that Apple makes next to nothing. They buy almost everything from the Android OEMs.

7. Leo_MC

Posts: 6935; Member since: Dec 02, 2011

It doesn't make sense to waste money on phones, no matter the price...

4. Wazupmrg

Posts: 146; Member since: Apr 10, 2017

I phone is going the way of blackberry. Lack of innovation and inability to keep up with customer's technological demands

5. baldilocks

Posts: 1486; Member since: Dec 14, 2008

Wrong. A majority of businesses and enterprises will only allow iPhones on to their secure networks. They won’t be going anywhere for the foreseeable future.

6. miketer

Posts: 505; Member since: Apr 02, 2015

He meant BlackBerry concentrating on services instead of actual handset sales, for growth.

8. foldablephone

Posts: 57; Member since: Sep 19, 2018

The problem is that there services revenue can only continue to grow if the amount of people owning iPhones at least stays the same. If iPhone users continue to switch to Android (better hardware and cheaper) they will stop using Apple Pay, iTunes, App Store etc. If Apple continue to have flat or falling iPhone sales until 2021 then this will start impacting their services revenue too. I think Tim Cook is just trying to get every penny out of loyal Apple fans for as long as he can as CEO, I wouldn’t be buying shares in them anytime soon.

9. stijnvbml

Posts: 69; Member since: Feb 20, 2013

iPhone users are not switching to android, just like android users do not often switch. The number of active IOS devices is bigger than ever. People are just able to hold on to their smartphone for longer then ever. Especially with high-end phones, which most iPhones are. People buy less iPhones, but not because people are switching.

11. mootu

Posts: 1449; Member since: Mar 16, 2017

I know 6 people in my friends and family that have dropped IOS for Android in the last 12 months, this may not be the case in the US but the US only accounts for 350 million people out of 7 billion and things outside the US are changing and people are switching. "The number of active IOS devices is bigger than ever" This is a big con used by Tim Cook to keep investors happy. An active user is classed as any device that pings an Apple server once a month, for example i keep an old 5S in a drawer just to check what Apple is doing with IOS, i turn the phone on around once a month so i am classed as an active user although i am most definitely not. Another part of the con is that Apple do not temove traded in phones from the active user list even though the vast majority are scrapped for recycling, Tim loves to keep his numbers up.

14. stijnvbml

Posts: 69; Member since: Feb 20, 2013

I live in the Netherlands and I know more people that switched to IOS in the last month than the other way around. But this kind of argument is irrelevant, because you and I do not know enough people to say anything about number of users switching. You may be using your iPhone 5s maybe once a month, but I think almost no one uses their old phone anymore, why would a regular user do that, so I do think the number is quite accurate. Calling it a con is nothin more than a weird conspiracy. It is actually illegal to lie to investors and without any evidence, it just a weird conspiracy.

16. midan

Posts: 2597; Member since: Oct 09, 2017

"so I do think the number is quite accurate. " It is, mootu is just those people who can't accept Apple success.

18. sissy246

Posts: 7035; Member since: Mar 04, 2015

No, you can't accept that apple if failing their customers in innovation.

21. almostdone

Posts: 426; Member since: Sep 25, 2012

Yep many people keep old iPhones as backup phones which is barely used but still classed as active. The don't spend any money on services for these phones. I know my partner has 3 iPhones only 1 is being used primarily.

22. midan

Posts: 2597; Member since: Oct 09, 2017

I read somewhere that if the phone hasn't been used in 2-3 months it's not active anymore

10. midan

Posts: 2597; Member since: Oct 09, 2017

"The problem is that there services revenue can only continue to grow if the amount of people owning iPhones at least stays the same. If iPhone users continue to switch to Android" Apple is getting more users than losing them, that's why their services does more and more money every year. IPhone sales being lower lately doesn't mean that iPhone users are buying Android phones, they just keeps their devices longer, just like Android users too. This is also wrong because when Apple give new service for their users it's new money. Even if Apple would lose users, when they launch these new services they have huge potential userbase for those services. (Upcoming video service, news service etc.)

12. mootu

Posts: 1449; Member since: Mar 16, 2017

"Apple is getting more users than losing them" If so why is market share not increasing?

15. midan

Posts: 2597; Member since: Oct 09, 2017

Apple sold half of the smartwatches in the market last year and their share is going down.

24. whatev

Posts: 2154; Member since: Oct 28, 2015

Let’s remember that android users are mostly school dropouts, maths, statistics, and others are not their best skills, they don’t understand that a company can sell more than the previous year but their market share decrease because the industry is growing and other companies are making their first steps

17. midan

Posts: 2597; Member since: Oct 09, 2017

19. sissy246

Posts: 7035; Member since: Mar 04, 2015

He is a extremely blind apple fanboy. He will twist anything you say to make apple look good.

20. midan

Posts: 2597; Member since: Oct 09, 2017

No need to twist anything, just pointing out facts

27. mootu

Posts: 1449; Member since: Mar 16, 2017

We can all post facts, such as iPhone sales down 15%https://techcrunch.com/2019/01/29/apple-posts-q​1-revenue-decline-with-iphone-sales-down-15-percen​t/https://www.fiercewireless.com/wireless/apple-s-iphone-revenue-down-15-holiday-quarterhttps://www.gsmarena.com/apple_iphone_sales_down_15_percent_past_quarter-news-35293.php Don't forget Q1 is traditionaly Apples best quarter.

28. midan

Posts: 2597; Member since: Oct 09, 2017

What that has to do with the fact that userbase is growing? You clearly don't understand the subject. Where is your fact that userbase is getting smaller? I pointed two links which are showing that userbase and marketshare is up

23. stijnvbml

Posts: 69; Member since: Feb 20, 2013

He has source, you don’t Why is he twisting the facts while he has evidence and you don’t.

25. whatev

Posts: 2154; Member since: Oct 28, 2015

What do you have to say about the GS10+ losing in speed tests to the XS Max, and also unlocking with a pic while using the face recognition?https://twitter.com/mobiflip/status/1100335146933

26. whatev

Posts: 2154; Member since: Oct 28, 2015

Oops I guess they were forced to delete the tweet, but here itishttps://twitter.com/applelianos/status/1102001803078631424?s=21 There is another thread about the in screen fingerprint scanner, but the one with the face unlock with a pic is just iconic, these new galaxies are just extremely safe lol

30. sissy246

Posts: 7035; Member since: Mar 04, 2015

Here you go Keep on wishing, lmaohttps://youtu.be/uru9AnkgzHc

29. sissy246

Posts: 7035; Member since: Mar 04, 2015

31. whatev

Posts: 2154; Member since: Oct 28, 2015

LOL, keep wishinghttps://youtu.be/_L8F9UK-TW8 https://youtu.be/cOYm1bPeMXM https://youtu.be/SzmXkymsg80 Now I’ll wait for your predictable response saying those youtubers are not recognized like EveRyThInGaPpLePro (I can’t stand him), or maybe you’ll surprise me with your objective and non fanboy (or girl) like answer since you’re criticizing fanboys, aren’t you sissy?

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