Technology

Two important ways Apple is preparing for life after the iPhone

Over the many decades of its existence, Apple has faced a lot of challenges. There was the company’s battle against IBM early in the PC era, the seeming dominance of Windows during the 1990s, and even the worry that the company itself might cease to exist in the dark days of 1997.

Lately, though, it seems as though the challenge for Apple might simply be that it’s ahead of its own game. Rumors of slow iPhone XS and XR sales are hard to substantiate, with the company stepping back from providing information on how many smartphones it is selling. But it does seem clear that the amazing growth of previous years is leveling off somewhat, whether because the new phones are more expensive or haven’t wooed customers away from their current phones.

The iPhone is, of course, a huge chunk of Apple’s business. In the most recent quarter, it accounted for 59 percent of the company’s revenue. Even if sales do start slowing or, eventually, declining, the company’s still going to be selling plenty of iPhones for years to come. But every product has a lifecycle—just ask the iPod—and Apple is all too aware of that. That’s just one reason that the company has worked hard to position itself for the future.

Services industry

Apple’s obviously talked a lot about its Services business in the last few years, and in 2016 stated an ambitious goal to double the revenue of that segment by 2020. That would mean an annual revenue of around $48 billion in 2020, which would likely make Services the company’s second largest division, after the 800-pound gorilla that is the iPhone.

echo sub with echo speakersAmazon

Apple recently announced that its Apple Music service will be available on the Amazon Echo.

The strategy in Services is multi-pronged. Firstly, the company wants to continue its reliable business selling content and subscriptions to users of its devices. Secondly, it wants to build out new services to add revenue from existing customers and to entice new customers. And thirdly, Apple wants to grow its Services subscribers by adding more people to its ecosystem, either by convincing them to buy Apple devices or—as my colleague Jason Snell adroitly pointed out this week—by expanding its customers beyond just those who use Apple’s devices.

With a TV streaming service on the horizon and the addition of its music services to other platforms likes the Amazon Echo, reaching that $48 billion in revenue number seems like an easy shot for Apple. In 2018, halfway to its 2020 deadline, Services revenue was $37 billion, more than halfway to its goal. If anything, I think the company gave its usual conservative guidance, and plans to blow right past that.

Health, care

Futureproofing goes beyond just expanding Services to sell to people. Apple’s always been at its best when innovation has been its driving force and while Tim Cook has taken plenty of digs in comparison to his predecessor, he’s still managed to press forward for one of Apple’s biggest new initiatives: health.

apple watch series 4 ecgApple

Apple recently updated watchOS with an ECG app for the Apple Watch Series 4.

Health cuts across many of Apple’s existing segments, and its moves in the market haven’t exactly been stealthy. Just this week, the company updated its primary health wearable, the Apple Watch, with an electrocardiogram feature. That’s a capability never before deployed in a mass consumer device. Elsewhere, the company has been working on putting digital health records in the hands of its users, as well as making it easy for researchers to harness their technology to push the science forward.