Apple’s Services event: What the indie analysts are saying

Excerpts from some of my favorites. Seen any I missed?

Jessica Lessin, The Information ($): The Apple Brand and Its Hidden Messages. What jumped out at me was the somewhat surprising way Apple leveraged social issues—specifically calls for greater diversity and inclusion—in its branding of them. And because this is Apple, which applies the same care to its sizzle reels as its iPhone bezels, no branding choice should go unnoticed… Is Apple doing it to take aim at its competitors? This theory makes some sense to me, particularly the language around ensuring “all stories” are told and finding “common ground.” YouTube and Facebook have shown themselves to be cesspools of polarization. Why not remind customers of that and point to a different way? … And thus these videos really do tell us more about the Apple of 2019 than meets the eye. Warm and fuzzy on the outside but a little cutthroat on the inside. That was a theme in Aaron’s story this week about how it deals with suppliers and the open Spotify complaint against it. This is nothing new and certainly has been accelerating with Tim Cook’s campaign to prove Apple cares more about user privacy than Facebook and Google. But it is worth remembering. It also confirms my earlier suspicions that we are set up for much more infighting between the tech giants than we realize.

Jason Snell, Six Colors ($): Us as a Service. I’m sympathetic to Tim Cook’s suggestion that Apple is now about a synthesis of not just hardware and software, but services. The mere existence of the Internet as a connecting factor means that Apple hasn’t been able to just focus on hardware and software for years now. Apple’s first attempt at Internet services were almost laughable, but it keeps getting better. And the App Store and Apple Pay have been pretty successful. If Apple can find a way to bring its entire ecosystem—hardware, software, and services—together to create great experiences, people will happily pay for them. But I am a bit concerned about what the growth of services does to the wallets of the people who use Apple’s products. I can put this all in the context of Wall Street demanding growth, which is true, but another way to view it is that Apple isn’t satisfied with you paying it every few years for a new Mac and a new iPhone—it wants your money every single month. So, by the way, do streaming services and cable companies and wireless companies and pretty much everyone else.

M.G. Seigler, Medium: A Billion Pockets, Y’all. I believe I’ve seen every single Apple event over the past decade-plus. Yesterday’s was without question the weirdest I’ve ever seen. So weird that I’m still trying to wrap my head around it. Twitter is helping me a bit, but jotting some notes down before I read others’ thoughts will help me more. Here goes. First and foremost, I think the entire event was arranged in the wrong order. While it was stacked to build up to the Apple TV+ unveil with all the celebrity fade-ins, this was by far the least interesting thing Apple unveiled. Sure, if the shows are good, that’s nice. But who does all this pomp and circumstance for a fall lineup? Well, beyond the folks that are trying to sell advertising against said lineup, which Apple is not… Look, whatever. It was mildly pathetic, but not quite as bad as the finger touch. I hope the content is good because I like good content. But revolutionary, this was not. This is Apple using the biggest wallet of all to access great talent. Period. That doesn’t mean it will work, but it’s the gameplan. And they do seem to have the right people to execute it. But enlisting Oprah to use the stage at the end to basically give a pitch to other talent to sign up with Apple was… weird. Really fucking weird.

Daniel Eran Dilger, Roughly Drafted: WHY DID APPLE THROW A TIM COOK EVENT AT ITS STEVE JOBS THEATER? Apple’s event was described as “truly bizarre” and “the weirdest” by GV partner and former Tech Crunch pundit M.G. Siegler, who went on at length to disparage everything presented as “silly” to “mildly pathetic.” Among other things, he wondered aloud why Apple didn’t spend any time on stage talking about the old Newsstand—a jab which sort of tipped the whole piece off as not really meant as criticism but rather just mean cynicism. A long effort at “look at me, I’m punching up!”
A variety of other writers took similar populist swipes at Apple’s event, often belaboring the idea that Apple has changed and that it’s all for the worse.  Why did Apple spend so much time perfecting a presentation outlining its vision for its future in Services, only to have its invited guests rip all over it and portray everything from its new credit card to video games to digital magazines and original TV programming as being some sort of unpleasant shift, or a high risk, dangerous move that’s not what we expect of the company, while also being derided as unlikely to make any real difference in a crowded market? The stridency of Apple’s critics is getting ever louder and more shrill, yet with no real or lasting effect.

John Gruber, Daring Fireball: Very Brief Thoughts and Observations on Today’s ‘Show Time’ Apple EventAPPLE CARD: Sounds good, but “low interest rate” is just words… APPLE NEWS PLUS: Are magazines still a thing?… APPLE ARCADE: This was the most cohesive announcement of the day… APPLE TV CHANNELS AND TV PLUS: This whole thing was… weird. I get what Channels is — the infamous “skinny bundle” that Eddy Cue has been trying to put together for years. Paying only for the channels you want is the right way to do this, but obviously a nightmare to negotiate with the actual networks and channels. It’s also coming to Roku and Amazon FireTV, which I understand but feels so strange.

apple services indie analystsBen Thompson, Stratechery ($): Apple’s Services Event. [This is] the needle Apple appears to be trying to thread: the only way that Apple TV+ makes sense strategically is not as a new product with a new business model, but rather as another extension of Apple’s integration, i.e. a way to not simply sell new iPhones but also Apple’s TV app generally, including the commissions Apple will collect from Apple TV channels. In short, Apple may increasingly be a services company in terms of the recurring revenue it earns, but its strategy is still very much rooted in a product world where differentiation comes from vertical integration.

Ben Bajarin, Techpinions ($): Apple’s Hope to Build a Story Telling Platform. While Apple is embarking on its own journey of proprietary storytelling with AppleTV+, the broader perhaps more interesting theme is Apple trying to create a platform for storytelling. If you look at the focus of the games, they are bringing to Apple Arcade, and they are mostly indie game developers who create immersive and cinematic gameplay that also tell a story… Second, we have magazines. While I’m not a huge magazine fan, I do recognize they often tell stories in a much different way than news publications for example… Lastly, we have AppleTV+. This was perhaps the most obvious push toward stories of all the announcements. Mostly because many writers, producers, and actors/actresses, were there to promote the stories they wanted to tell. Apple happens to be the platform they choose, mostly because Apple gave them the most money, but I think part of Apple’s pitch was the overall engagement and type of customer that Apple acquires. While Apple can and will keep paying for this content, I do think part of them hopes that the impact or the results of these stories being told on Apple’s platform has great impact and perhaps brings more storytellers to their doorstep.

Neil Cybart, Above Avalon ($): The Apple Services Narrative. Apple’s services strategy continues to be misunderstood. While services are indeed very important for Apple, their value is not found with the reasons often cited in the press, such as to offset slowing revenue or profit from iPhone or to pivot Apple away from hardware. Both of those reasons are simply wrong, demonstrating a fundamental misunderstood of what is driving Apple management. In one of Apple’s initial slides, Tim Cook defined the word service as “the action of helping someone or doing work for someone.” The slide spoke volumes to me. Cook was clearly telling the world that Apple was not going to announce some kind of pivot on stage. Instead, Apple was going to unveil new ways of helping both customers and creators.

My take: Sometimes it’s easier to see the big picture when you’re not focused on next quarter’s results.

See also: Apple’s TV+ event: What the analysts are saying

9 Comments

  1. David Emery said:

    Two quotes, cherry-picked to summarize the event:

    Snell: Apple isn’t satisfied with you paying it every few years for a new Mac and a new iPhone—it wants your money every single month.

    Thompson: [A]nother extension of Apple’s integration, i.e. a way to not simply sell new iPhones but also Apple’s TV app generally, including the commissions Apple will collect from Apple TV channels.

    So the core question is, “Will this have enough value-added that people will continue to pay into the Apple ecosystem?” (For me, it’s “answer hazy, ask again later” 🙂 I have zero interest in an Apple credit card, and am unlikely to go for any games. As we contemplate cutting cable, it’s not clear if adding Apple’s services to existing Amazon & NetFlix, or even replacing one of those existing services will give us what we want. I like the idea of ‘buy only the channels you want,’ particularly given how much of our current cable subscription goes to sports channels I do NOT want.)

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    March 30, 2019
  2. Aaron Belich said:

    Anyone thinking that perhaps TV+ wants to take on YouTube and user generated content, slap some rules on all of it and create an App—I mean a TV+ store?

    1
    March 30, 2019
  3. David Drinkwater said:

    A couple of potentially contradictory thoughts:

    1) John Gruber, Daring Fireball: “Are magazines still a thing?…”
    No, but as we luk at the barrin wastland of internit contint that is goin on today, dont we want a hier standerd?
    I hope that, with a decent delivery mechanism and a sensible revenue base, CONTENT, be it glossy, slick, or simply black and white, well-read ink, can return to the internet.

    2) Neil Cybart, Above Avalon ($) (or am I misreading and this is EX-PED): “My take: Sometimes it’s easier to see the big picture when you’re not focused on next quarter’s results.”
    I am hopeful that Apple is thinking way longer term than next quarter’s results (or this quarter’s results, for that matter). I am not a fan of the watchers on Wall Street.

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    March 30, 2019
  4. Fred Stein said:

    Neil Cybart nailed it. Ben Bajarin, thanks for featuring story telling as the focus..

    Gruber gets the problem with magazines, but fails to see how cool Apple’s solution is. It reminds me of the original iTunes, which gave us a better option than buying a bundle of songs for $15. BTW, Magazine advertising revenue is falling off. Apple gives magazine publishers a new source of income (albeit small) and exposure.

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    March 30, 2019
  5. Jerry W Doyle said:

    The subscription service model is proliferating through multiple industry sectors on the scale of what airlines and hotels started with extra fees for services once embedded in the original provided purchase. I bought a new car about a year ago. Two weeks back I received a letter reminding me that my subscription services from Wi-Fi to dynamic navigation, to destination assist to remote service (that all came free during the initial year of ownership) soon would be ending. Excluding the Wi-Fi, the annual subscription service costs to continue all the other services is $160. Conducting “not” a scientific survey based on statistical analysis but an informal survey based on informational gathering amongst my friends and relatives who drive similarly my automobile brand I found approximately 40 percent of drivers elected to renew their annual subscriptions for in-model premium services. I looked up a few moments ago my brand of automobile. Last year the manufacturer sold globally 2.29 million vehicles. If one does the math (on this non-scientific survey) then one sees that 40 percent of 2.29 million is 916,000 @ $160 is $146,560,000 the brand’s customers are paying annually to the manufacturer for embedded subscription services in customers’ respective vehicles.

    As technology advances it seems naturally for me to continue that umbilical cord tech-connection to my vehicle when driving inside and when on the other side of the globe wanting to see if all is ok with it at home. I suspect that we will see more and more industry sectors going to some form of subscription services model to keep the flow of revenue streaming (excuse the pun) long past the original sale.

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    March 30, 2019
  6. John Konopka said:

    I found Oprah’s appearance interesting. She is not a technical personality. She communicates with her audience. That communication is the glue holding that group together. Up till a few years ago TV was the medium for this. Now she appears to be transitioning to a new medium; iOS. I’m interested in seeing how this works.

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    March 30, 2019
  7. Kathy Corby said:

    Whoa, Jessica, cynical much? Remember, those photos of MLK and RFK were on Tim’s wall before he became CEO. And I was there at the shareholders’ meeting when he told off the ultraconservative who complained about Apple’s commitment to the environment by saying “There are things Apple does because they are right– not for the bloody ROI.” Gutsy stance for a CEO. My kinda guy.

    1
    March 31, 2019

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