You are the product, but with an Apple twist – Computerworld | Hot Mobile Press

In the old days of a moment ago, Apple helpfully pointed out that when you use free services that use your data to sell it for profit, you become a product. But Apple’s new strategy means most of its users will also become commodities, albeit with an Apple twist.

I’m talking average revenue per user.

Apple’s beautiful game

To play a game as refined as that of the England women’s team (*See below) Apple has recognized that its hardware products are a platform with a unique audience. The characteristics of this audience allow the company to build engagement, customer loyalty and growth (important for a massive multinational company cursed with the task of seeking constant growth in a global economy undergoing existential change).

In “interesting times,” growth is impossible unless you build on certain traits that Apple already enjoys. In a recent email shared with me, Julie Ask, vice president and principal analyst at Forrester Research, pointed out several of these characteristics:

  • Apple’s customers tend to be wealthier than those on competing platforms. I’ve seen claims that the median income for a US Android owner is $69,647 while iPhone users earn $88,256.
  • Additionally, 35% of Apple’s iOS owners have household incomes over $100,000 per year. An iPhone user is three times more likely than an Android owner to have a total household income of over $300,000 per 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 customer satisfaction and loyalty hit all-time highs across all major product categories across all geographic segments during the most recent quarter. It also told us that nearly half of Mac or iPad buyers and over two-thirds of Apple Watch buyers were new to those products.

What does all this do?

It means rain or shine…

…Apple is weatherproof

While the macroeconomic climate appears gloomy, Apple management told us that the company can’t make enough iPads or Macs to meet demand and hasn’t seen any apparent impact of the general gloom on its iPhone sales.

Apple’s top-selling product, the iPhone, generates about 49% of the company’s net sales, although it’s interesting that services now make up 23.6% of net sales, according to the most recent statement.

Of course, as I’ll keep saying, Apple’s move towards services is fundamentally based on high quality and strong privacy. These core principles are best exemplified by the hundreds of award nominations Apple’s TV+ service has won this year and its numerous commitments to user privacy.

The thing about the services the company offers is that they know their audience. It knows its customers are loyal, happy, and have a high level of confidence in the company’s ability to do what’s right (with exceptions). What else does it know about its audience? They are typically affluent with a high representation of creatives and knowledge workers.

Therefore, when the company tells us that it now has 860 million paid subscriptions to services on its platform, it is telling us that it has an edge even in an economy of weak hardware sales.

It has tremendous potential to convert those customers into products or, to say it far more fairly, convert them into the high-quality services it offers.

Apple is adding five new subscribers every second

Apple’s trajectory remains clearly visible. For the past 12 months, the company has added a staggering 438,000 new subscribers every day. To put this in perspective, the 160 million new subscribers Apple added to its services last year means that it’s currently attracting five new subscribers every second, every day.

Apple has at least $1 trillion in service-centric upside, according to Morgan Stanley.

  • Take Apple Pay. U.S. usage of Apple Pay has grown from 12% in 2020 to 21% in 2022, and growth has been even faster elsewhere. Almost one in five adults in the US now uses Apple Pay, and about one in ten adults uses the service in Europe.
  • Subscriptions are on the rise. Forrester Research tells me that 76% of US adult online users use at least one music or video streaming service. They adopt them to save time, get 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 others offer compromised products for free to turn you into the product, but Apple makes you pay for the products you use. However, as the data shows, its solutions are just as addictive. You’re still the product, but this mix of privacy and choice is Apple’s unique twist.

*One more thing:

I mentioned the England women’s team. The world has seen this game. More than half was cheering as the women achieved what the men had failed to do in 60 years and brought the trophy to Britain. We know that Apple invests in sports entertainment. We also know that the USA will go football crazy in the years to come as the World Cup approaches. Apple buys rights to stream some of these games. Someone needs to speak to Eddy Cue: In a changing world, women’s football could become the fastest-growing new sport opportunity, and if the company wants to grow its TV+ service while standing up for its values, investing in sports rights for women’s football tournaments seems a smart one to be a bet.

Joking, I know, but maybe Sarina Wiegman is the new Ted Lasso…

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