Apple: Extortionate Rent Collector

Apple Used to Be an Inventor. Now It’s Mainly a Landlord.

For years, analysts and journalists watching Apple Inc. have talked up the growing importance of services, as opposed to hardware sales, to the company’s top line. But it’s only now that Apple’s business model truly appears to be shifting toward collecting rent from the company’s ecosystem and increasingly relying on gadget sales to perpetuate this rent rather than drive growth. Apple’s decision to stop reporting iPhone unit sales underscores the shift.

Boldfaced emphasis added by me.


Rent extraction from a user base that finds it hard to go away may sound a bit like extortion. But it’s more honest and upfront than extracting data from users in ways they often don’t understand and then making money off the data, as Facebook does. That honesty is in itself a competitive advantage for Apple as it gradually reimagines itself as more of a services company. Now, the challenge is to grow the services offering fast enough to make up for potential iPhone revenue losses; gadget prices cannot keep going up forever without hurting the top line, and in the end, a phone is just a phone. We only need it to gain access to all the nice digital stuff out there.

Boldfaced emphasis added by me.

I think an entire swath of people at Apple need to be fired. This is the wrong direction to take and it will come to haunt them.

Previously here:

Apple Runs Scared, Runs Stupid, Runs Smug

This entry was posted in Apple, So Stupid It Hurts. Bookmark the permalink.

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