Services (Content, iCloud, Fitness+, etc) are just one approach. They're trying AR (Reality Pro), Cars maybe?
In the future if your email service suspects you of being a spammer you will no longer be welcome at your local grocery store.
Point being, the Unix philosophy has its own issues, especially around the foundations of how it all glues together.
If you look at any lists of largest private companies, you’ll see many that are likely highly profitable but also very boring stay-in-their-lane type of businesses; businesses that know their cash cow and sticks to it. It’s Wall Street investment that tends to drives risky moves in pursuit of growth.
Wall Street doesn’t care that much about profit. They care about growth.
Any action that will raise the stock price, even at the cost of customers or profit, is a win in their book.
After all, they’ll sell just before the party is over and make out like robber barons.
Apple TV+ has never seemed like a core product to me though, just something they can bundle with iPhones and iPads to round out those products.
My point is I’m not so sure it’s plateaued- I don’t buy them as often because I don’t like replacing things that still work, but they do keep adding more features that I’d be interested in. (And removing some, like headphone jacks and buttons)
Take that as given, it still doesn't explain why, among all business opportunities, Apple picked 1 An area they had little experience in 2 That already serves its customers well 3 That is according to OP low margin.
On (2): Cell phones in 2005 were way worse than Netflix, HBO, ESPN were when Apple would have been market-researching Apple TV+.