Apple is on top of the world. From that point of view, it is difficult to see how the company could be anything other than a market leader and trendsetter. I don’t want to imply that Apple’s decline and fall is imminent, but those who remember the dark days of the 1990s know that success is never a given.
In any case, it is unlikely that a company as massive and dominant as Apple would simply disappear. But as the company has grown and matured, its nature is undeniably changing.
These changes are not without precedent. Over the past few decades, there has been a pattern among dominant technology companies. Where once they might have ruled the world by producing what everyone wanted – whether it’s a hardware product or a critical piece of software – they seem to be evolving into something new, where they focus less on delivering a key product and more on what services they provide.
Taking care of business
Once upon a time, IBM was the undisputed leader in the computer market. It might be hard to imagine, given the company’s current existence, but IBM employed an army of salesmen in suits and ties to sell the world’s largest company on the idea of computers.
From the very beginning, Apple saw themselves as the antithesis of IBM, not bound by tradition or the tie-wearing corporate ideology. Instead, they saw themselves as pirates and rebels, perhaps best summed up by a famous photo of co-founder Steve Jobs.
IBM dominated the computer market when Apple started. They were everywhere. And yet IBM was beaten, at least in the computing arena. However, as the company had spent time developing over several decades, acquiring various companies and expanding a variety of other businesses, the defeat in the computer market did not end with an existential crisis for the company; instead, they focused on business services and have been successful ever since, although IBM is not as well known as it once was.
Make a Microsoft
This brings us to Microsoft: another company that was at one point the biggest player in the computing world. Microsoft was hugely successful in the 1990s, the heyday of Office and the Windows operating system. And, like IBM, they were Apple’s biggest enemy during that period, as Mac and Windows were locked in a perpetual battle for the computer market.
But the company missed the bandwagon of the mobile computing revolution and, again like IBM, has changed tactics to focus more on services. These days, Microsoft is everyone’s friend. In the past few weeks alone, the company has announced partnerships with Amazon (to allow sending Word documents to the new Kindle Scribe), Meta (bringing Teams and Microsoft 365 to the Quest VR devices) and even Apple (bringing Apple Music to Xbox and iCloud Photos to Microsoft devices).
It’s a fascinating development for a company that still controls important parts of our everyday technology experience, from consumer apps like Word and Excel to underlying technologies like Azure. But Microsoft quickly realized that it can’t count on being the biggest company forever, and sometimes it’s better to make itself an indispensable part of the landscape.
Services as success
How does this affect Apple? Recently, articles have surfaced that they are expanding their ad business, with the possibility of ads on Apple TV Plus as well as elsewhere in the Apple ecosystem. This was several years after they rolled out their first attempt at creating an advertising system, Iad, which failed miserably and quietly disappeared.
While ads aren’t something we associate with Apple, the reasoning behind it is straightforward: they saw what was happening to some of their biggest rivals. Just because you’re on top right now doesn’t mean you’ll be on top forever; better to control your own development than to force it.
That’s why Apple has shifted its focus to services over the past decade. Yes, the iPhone still accounts for roughly half of the company’s revenue, but services actually account for 25 percent, which could soon be larger than the remaining three categories (Mac, Ipad, and wearables) combined.
While Apple hasn’t quite adopted Microsoft’s strategy of becoming “everyone’s best friend,” it’s not hard to see that they’ve made moves in that direction: Apple Music and Apple TV Plus are both available on a host of platforms, including those made of some of the company’s biggest competitors. Airplay has been licensed to third-party speakers and televisions. They have even collaborated with their rivals on standards such as Matter.
All of this is about the company protecting itself against a future where the iPhone is no longer the influential product it is right now. There may come a day when Apple finds itself at the Home of Old Technologies, reminiscing about its bygone days with Microsoft and IBM. But Apple seems determined that this will happen in the distant future.
Translated and edited by Petter Ahrnstedt