This has meant that Android has something like 2bn daily actives vs Apple's 700mn across devices. Apple's profits are mostly sitting in cash -- a pretty poor use of capital. And it's a lot of cash, some 250bn of it. It's ridiculous and the opposite of Amazon's strategy. Especially if Apple intends to move to services, it only makes sense to have more active subscribers.
Furthermore, hardware monetisation is upfront but services revenue is recurring (user lock-in, inertia to switch, better forecasting, etc).
Supposing Apple had 1.5bn active devices, their services revenue would be considerable higher than the current 7bn quarterly recurring. That would surpass hardware profits in the long run and Apple wouldn't sit on idle cash.
As the market starts to saturate, customer acquisition becomes costlier. A good example of this is AOL Internet when they were printing so many free Internet CDs (for giveaways) that they took up 70% of the world's CD production capacity. Their rationale was that acquiring customers would never be this cheap again (Microsoft and others were entering into broadband). So if they acquired the customers for cheap today, they could monetise them much more easily (the LTV was considerably favourable in terms of SAC).
It's hard to say what could have been. But what's certain is that Apple is less of a hardware company now and more of a services company as is clearly apparent now from their earnings reports.
At a time when Facebook, Amazon and Google are all vying for market share, Apple seems to take pride in hoarding cash through profits. You have to wonder if it's the right strategy.