Apple services rake in the Moolah

iOS 8.4 Confirmed for June 30 Launch_ Debuts with Apple Music_photo

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Apple’s fall in second quarter revenues might not have come as a surprise for the Cupertino based major given that the company had reported declining iPhone sales as far back as January this year. The decline in profit has happened in the backdrop of a global fall in smartphone shipments-dropping 3% from 345 million devices to 334.6 million devices compared to last quarter. iPhones accounted for 51.9 million of the total units sold, down from 61.17 million units last year. What can this fall be attributed to really? As far as the markets of Europe and US (Apple’s erstwhile strongholds) are concerned, a saturation point is said to have been reached. The general contention is that the smartphone market has become so mature that the action has shifted from the handset segment to the service segment. The heydays that giants like Apple and Samsung enjoyed in erstwhile strongholds like US and Europe in the handset business may well be over, but the doors have been thrown open for these tech giants in new emerging markets.

From the global perspective, it’s not all honky dory, but when you look at particular regions specifically, there is much to be expected. In what has been part of a wider technological trend we’ve been observing over last few years, and as I have mentioned before, the smartphone has successfully been able to mimic the functionalities of standalone devices like the good-old camera, radio, music player, notifier, storage device. The versatility of the device has been unmatched so far( something that no other electronic device can boast of really). All along we have seen it evolve to become thinner in size and more elegant in appearance. From being a handy device that we could depend on to send that all-important mail or make that pending bill payment, we are now delving into the possibility of them turning into full-fledged assistants that can direct each and every task that we undertake. Imagine what it would be like to have someone throw up suggestions at every twist and turn without our prompting. The recent inroads being made in artificial intelligence technology as evidenced by the introduction of ChatBot software by Facebook are pointers towards the this new trend.

There are some who contend that the Future of Apple is not in hardware but in services. Hardware sales apart, the next major revenue generating category for Apple includes services like Apple Music, Apple Pay, and App Store sales. Here are some interesting statistics for you to go through. The number of subscribers to Apple services grew 25% in the first quarter totalling $5.5 billion in revenue. In quarter 2, the existent subscriber base was seen to rely even more on Apple services, pushing revenue to $6 billion. App Store revenue has also climbed 35%-the highest jump in any quarter so far.

Revenue earned from services notwithstanding, it doesn’t mean that Apple should disregard its handset business. The smartphone market scene is highly vitiated in some of the emerging markets where a new launch is seen every other day. Apple has been in no mood to be left behind with four iPhones scheduled for release this year. Apple has always relied on an impactful launch to create the necessary hype required to push sales. In talking thus, I am reminded of the acclaimed 2007 launch of the iPhone SE as Steve Jobs went about explaining the revolutionary features of Apple’s iPhone. To replicate something at the scale and level of the first iPhone launch will be difficult for Apple to achieve in the near future.

The grandeur of present-day mobile phone launches is awe-inspiring. We have become habituated to the sight of droopy-headed company honchos strut around on stage with the company logo affixed in the background. Glitz and glamour have become a regular feature at such launch events as evidenced by the LeEco launch that happened in Beijing recently. In fact, such is the hysteria surrounding a launch that the gadgets that were meant to be in the spotlight in the first place, get relegated to the background. Going by current trends, an iPhone launch in space would augur well for Apple’s future prospects!