Comment by rahoulb | Hacker News Reader

Comment by rahoulb | Hacker News Reader

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I’ve just finished “After Steve” by Tripp Mickle and it strikes me as a good interpretation of the last 10 years at Apple strategically.

- Apple was pretty much dead when Steve Jobs came back but he rescued it through a string of great products (iMac, iPod, OSX Macs, iPhone and iPad)

- When Tim Cook succeeded Steve he knew he wasn’t a product person so Jony Ive took on that role

- Thanks to (mainly) the iPhone Apple stock started climbing and more and more investors started taking an interest in the company

- The iPhone 6 and 6S were the turning point - the 6 sending the stock through the roof and the 6S crashing it. As far as investors are concerned, the trouble with product companies are that you’re only one quarter away from disaster

- Ive struggled with his grief over losing Jobs, plus the weight of being the company figurehead without Jobs to shield him and gradually withdrew from Apple

- Acquiring Beats and launching Apple Music, plus the revenue from the ever growing App Store offered Tim Cook a way out, in the eyes of investors.

- Apple changed their strategy to become a services company that values recurring revenue rather than one reliant on continuing product innovation. Cook was quite explicit about this but it’s taken a few years for the shift from products company to services to become apparent.

> Apple changed their strategy to become a services company that values recurring revenue rather than one reliant on continuing product innovation.

Apple's hardware revenue, both in general and in specific categories such as iPhone, Mac, and iPad, is higher now than ever before. Plus now they have Watch, AirPods, etc.

Apple is pursuing "services" revenue simply because it can. It's a supplement for hardware revenue, not a replacement. It's easy money, because customers are locked in. The margins on "services" revenue are practically obscene.

IMO the jury is probably still out on whether or not this strategic change has been made and cemented into the culture.

At this scale these types of strategic changes play out on a large time horizon (decades) so from an external perspective it is difficult to know.

If Jobs were still CEO I'd expect him to be continually looking for the next breakthrough in consumer technology. Are the leaders at apple currently doing that? I don't know. I have heard that they may be investing into a self driving car play.

Also if Jobs were still CEO I wouldn't be surprised to have seen Apple behave as they have in the past 15 years (slurping up easy revenue like headphones, recurring revenue services) but as a visionary Jobs would concurrently be intensely focused on the future.

> Apple's hardware revenue, both in general and in specific categories such as iPhone, Mac, and iPad, is higher now than ever before. Plus now they have Watch, AirPods, etc.

If you look at the trajectory of iPhone sales (others devices barely matter), its reaching a peak. As are smartphone sales in general.

> (others devices barely matter)

Last quarter, iPhone was 49% of Apple's total revenue, other devices 28%. Obviously iPhone is the biggest, but I wouldn't say 28% barely matters. That 28% is by itself bigger than most companies in the world.

> its reaching a peak

You could have said the same thing in, say, 2018. There are peaks and valleys. I'm not sure anyone can predict the future. In any case, hardware accounts for 77% of Apple's revenue currently.

In a way, you're both right. iPhone sales were 231 million units in 2015 and 242 million in 2021 (with some drops in between).

Revenue is higher in 2021, but probably as a result of selling higher priced SKUs.

>- When Tim Cook succeeded Steve he knew he wasn’t a product person so Jony Ive took on that role

I would argue in Steve's calculation, Tim Cook was suppose to settle any dispute between Ive and Scot Forstall. And Ive would stick to Industrial Product Design. While the Software would be from another Team of UI expert.

Instead Tim Cook gave every design decision to Ive. And Tim Cook "merged" those group together in the name of "collaboration". A few from HIG Group retired due to conflict with Ive. And we end up with iOS7.

>- Acquiring Beats and launching Apple Music, plus the revenue from the ever growing App Store offered Tim Cook a way out, in the eyes of investors.

I am pretty sure that is Eddy Cue's idea. Arguably the current Apple seems to be Eddy Cue's Apple. Apple Music, Apple TV+.

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