iPhone sales continues to decline (down another 13% vs this quarter last year), but services are making up for it
Apple did make price adjustment in China, including cutting wholesale price and promotion. I am wondering if those eats into Profits.
Having said that, in the Conference Call:
-Active iPhone installed base grew to a new all-time high in every operating segment ( Including China )
-Install base growing, people are holding onto devices longer, but staying inside the ecosystem
And interesting bit on 5G. Tim Cook says Apple doesn't comment on future products, but says it is "extremely early innings" for 5G, especially on a global basis.
May be we wont even see a 5G iPhone in 2020.
- Apple Music
- iCloud
- App Store / iTunes / Apple Books
- Apple Pay
- Apple Care
- Licensing (i.e. default Google search)
- Apple News+
- Apple Arcade
- Apple TV+
- Apple Card
There is roughly $10 per user paid to Apple ( iPhone, iPad, Mac ) for using Google as default search engine. Last estimate were $9B. Before you ask the Active User and $9B don't align, Keep in mind this is users excluding China, where Google is not available.
And App Store purchase, that is the 30% cut Apple received.
These three item likely combined to be 80%+ of Apple Services Revenue. The rest are iCloud, Apple TV, Apple Music, Apple Card etc..
Seriously, there's just no good reason for a general consumer to purchase an iPhone today. Build quality on the Android devices even in the $200 realm are damn near what the iPhone offers.
For the record: I've used iPhones since 2010. I've never had an Android until this year. It came time to upgrade, and I did my research. Simply put, there's nothing on the flagship iPhone that most vastly cheaper Android phones can do. I'm not a fanboy, I vote with my dollar.
* iOS (I prefer it over android)
* customers already tied into the apple ecosystem
* more of a focus on privacy (admittedly, this one is probably debatable)
To wit: Apple knows every app you ever downloaded, and there is nothing you can do about it. Every time you click on an address link, it sends the address to Apple, and there is nothing you can do about it. Any time an app looks up your GPS location, that location is sent to Apple, and there is nothing you can do about it. If you want to write apps for your own device, you need to give card details to Apple, and there is nothing you can do about it. A phone with Google Play services doesn't suffer from any of these problems.
"By enabling Location Services for your devices, you agree and consent to the transmission, collection, maintenance, processing, and use of your location data and location search queries by Apple and its partners and licensees to provide and improve location-based and road traffic-based products and services."
It will also send your location to Apple when no app is requesting your location:
"If Location Services is on, your iPhone will periodically send the geo-tagged locations of nearby Wi-Fi hotspots and cell towers in an anonymous and encrypted form to Apple, to be used for augmenting this crowd-sourced database of Wi-Fi hotspot and cell tower locations."
Unlike on Android, you cannot get your location without sending this data to Apple:
"To use features such as these, you must enable Location Services on your iPhone"
Google makes money by targeting users, not by selling their data.
I don't like ads in general, but privacy is not lost because of Google.
Cambridge Analytica run on FB for a reason.
Not even sure why this is considered debatable. Even if it's just "perception" (which I doubt) it's a real reason to buy.
- Very subjective. Further, from a feature set perspective, you're not missing out on much (anything?) with Android. It used to be that you could only get certain Apps on iOS. That's simply not the case anymore. So it comes down to a raw, subjective preference... Like what color do you prefer - green or blue?
* customers already tied into the apple ecosystem
- I was in the Apple ecosystem for ~9 years. Switched over to Android this year. Took me all of a couple days to make the switch. Turns out I'm more embedded in Google's ecosystem than I thought. Apple was just a conduit for Google services, in many ways.
* more of a focus on privacy (admittedly, this one is probably debatable)
- A compelling reason for the technically aware. My post however was about the "general consumer" ... 99% of people are going to be just fine on Android v.s. iOS when it comes to privacy. For god sakes, they're likely already using Facebook/IG.
More so that someone with a 6S or better has little reason to upgrade; the improvements have been incremental.
> Build quality on the Android devices even in the $200 realm are damn near what the iPhone offers.
It's not just the software. I'm guessing you haven't used any of the new + cheap Android phones? They might surprise you.
When you consider how a phone is the primary computing device for a lot of people, it's an even easier decision.
Enough of those differences, and things start to really add up. Enough things add up, and you realize that money could have been making you ~8% in an index fund for the last year. Suddenly, the iPhone, the multiple Starbucks, the BMW, the designer clothes... all things rationalized as "just a few bucks a day" ... end up costing way more than that.
For me, being able to iMessage / AirDrop / Facetime people is worth the money just from a people standpoint. Apple has a lot of vendor lock-in, and they still have the most polished product by far.
In the Android world, I don't think I would recommend anything but a Pixel device just because they get all the security updates and get them faster than Samsung and all the rest.
For the record, my phone is a Pixel 2.
The bigger differentiator though is the app stores. If there's an iOS app or Android app that you need, then the decision is made for you.