At that time, a moment ago, Apple helpfully pointed out that when you use free services that mine your data to sell for profit, you become the product. But Apple's new strategy means that most of its users are also becoming commoditized, albeit with an Apple twist.
I'm talking about the average revenue per user.
Apple's beautiful game
Playing a game as slick as the England women's team (*see below), Apple recognized that its hardware products are a platform with a unique audience. The characteristics of this audience allow the company to generate engagement, customer loyalty and growth (important for a large multinational corporation cursed with the task of seeking constant growth in a global economy facing existential transformation).
In "interesting times", growth is impossible unless you develop certain features, which Apple already benefits from. In a recent email shared with me, Julie Ask, vice president and principal analyst at Forrester Research, highlighted several of these features:
- Apple customers tend to be wealthier than those of competing platforms. I have seen claims that the average income for an American Android owner is €69,647, while an iPhone user earns €88,256.
- On top of that, 35% of Apple iOS owners have a household income of more than €100,000 a year. An iPhone user is also three times more likely than an Android owner to have a total household income of more than €300,000/year. (Note: this does not apply to Apple journalists, by the way.)
- 18% of Apple users only own Apple devices.
Add to that the company's recent claim that in its most recent quarter, customer satisfaction and loyalty hit an all-time high across all of its major product categories across all geographies. It also told us that almost half of those who bought a Mac or iPad, and more than two-thirds of those who bought an Apple Watch, were new to those products.
What is the effect of all this?
That means, rain or shine...
...Apple is weatherproof
While the macro climate looks gloomy, Apple management told us the company couldn't make enough iPads or Macs to meet demand and didn't see an obvious impact of general pessimism on its iPhone sales.
Apple's best-selling product, the iPhone, generates about 49% of the company's net income, although it should be noted that services now account for 23,6% of net income, according to the latest statement.
At its core, of course, as I'll go on to say, Apple's turn to services (despite issues like CSAM scanning and App Store ads) is based on strong, high-quality personal privacy. These fundamentals are best exemplified by the hundreds of award nominations earned by Apple's TV+ service this year and its many commitments to user privacy.
The particularity of the services provided by the company is that it knows its audience. You know your customers are loyal, satisfied, and have a high degree of confidence in the company's ability to do the right thing (with exceptions). What else do you know about your audience? They tend to be affluent with a strong representation of creatives and knowledge workers.
That's why when the company tells us that it now has 860 million paid subscriptions to services on its platform, it tells us that even in an economy depressed by hardware sales, it has an advantage.
You have tremendous opportunities to turn those customers into products or, to be much fairer, turn them into the high-quality services you provide.
Apple attracts five new subscribers every second
Apple's trajectory is still quite visible. Over the past 12 months, the company has attracted 438.000 new subscriber customers every day. Simply put, the 160 million new subscribers that Apple has attracted to its services over the past year means that it is currently attracting five new subscribers every second of every day.
Apple has a service potential of at least $XNUMX trillion, according to Morgan Stanley.
- Take Apple Pay. Apple Pay usage in the US grew from 12% in 2020 to 21% in 2022, and growth has been even faster elsewhere. Nearly one in five American adults use Apple Pay today, and about one in 10 adults use the service in Europe.
- Subscriptions are increasing. Forrester Research tells me that 76% of American adults online use at least one music or video streaming service. They adopt them to save time, do good business or save money; they reject them because they want to avoid high fees or long-term commitments, the analysts said.
The difference between Apple's business plan and so many others in Silicon Valley is that while others offer committed products for free to make you a product, Apple charges you for the products you use. However, as the data shows, their solutions are still just as addictive. You're still the product, but this mix of privacy and agency is Apple's unique touch.
* One more thing :
I mentioned the England women's team. The world saw this game. More than half cheered as the women achieved what the men failed to do for 60 years and took the trophy back to the UK. We know that Apple invests in sports entertainment. We also know that the United States will go soccer crazy for years to come as the World Cup approaches. Apple buys the rights to broadcast some of these matches. Someone has to say a word to Eddy Cue: in a changing world, women's soccer could become the fastest growing new sporting opportunity, and if the company wants to grow its TV+ service while maintaining its values, investing in football for women's sports rights seems like a good option. a smart bet.
It's funny to say, I know, but maybe Sarina Wiegman is the new Ted Lasso...
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