One of the highlights for Apple’s investors in last months disappointing earnings call was the growth of Apple’s Services product lines and the suggestion that the company would focus on service growth to offset drop off in hardware sales.
Which is a similar tack currently being taken by Microsoft. With not a small amount of success.
For Apple that may prove to be more of a problem.Its services are generally implemented, managed and controlled in a much less impressive way than its physical products. Given the wide number of alternative providers for each of those products, Apple is becoming reliant on existing customer good will to keep the services-led model viable.
So upsetting those customers is inherently dangerous for the strategy.
Getting services to work for customers requires three key requirements to be met. The service must create a perceived value for the customer, the service must answer a customer’s need and the service must be very reliable indeed.
So taking Apple Music as a starting point. Apple made a real hash of the original product, garnering plenty of negative feedback from the sort of Apple fans who would grip their iPhone between their butt cheeks if that was how Apple instructed them to use it.
There’s clearly a customer need here – streaming music services are growing with each passing quarter – and there’s also customer value in having a music service tightly integrated with their phone hardware and platform. Reliability? Tales of wiped music libraries and incorrectly matched tracks don’t speak to reliability.
With Spotify waiting in the wings with a music service that delivers a better all round package Apple Music looked like a lame duck.
iCloud? Similar story, reliability is the service’s Achilles Heel. And when Dropbox and OneDrive, to name just two services, do a much better job who would risk iCloud? Apple’s Photos service that is nothing more than a device backup, doing nothing to alleviate an iOS user’s concerns around limited on device storage.
Even Apple TV, which had an enormous head start and by rights should own the living room hasn’t been immune from Apple’s clumsy labouring.
It adds up to a risky bet on services – and given that services are undoubtedly the way forward for Apple, its a weakness the company needs to fix. The good news is that Apple can fix these problems, it has the money to do so and the desire. If nothing else it can go out and acquire the businesses that do this well and integrate them into iOS.