Apple's Show Time?

The marquee event streamed live from the Steve Jobs Theater, Cupertino. While most of the links which streamed the event have been removed, you can watch the highlight reel here or read all the updates here.

Tim Cook started by stating the dictionary definition of a service, viz. “act of helping someone or doing some work for someone.” He also highlighted the current range of offerings Apple provides — powerful hardware coupled with easy to use software. Combine this with some exceptional range of services and Apple pivots to a platform-like “walled garden” software services.

“We’ve been growing our collection of World Class Services and that’s what today is about.” — Tim Cook

Let’s look at some numbers along the way -

1. Apple announced it has 1.4 bn active iOS devices across the world in their Q1 earnings report.
2. 60% of iOS users have one Apple device while 40% have multiple devices.
3. Assuming the 40% own exactly 2 devices and doing some simple math will yield a total of 1 bn distinct iOS users. (There are many who use Android Phones but a Mac-book and iPhones but a Windows laptop. Therefore, for simplicity we can conclude that this math will hold strong.)

At the moment the 1 bn users enjoy a beautiful and tight integration of software, hardware, and services. For example, the camera allows you to capture the beautiful moments and you can then use the iCloud to store it in the cloud and share it with the people you love in a ubiquitous manner. Currently, their services’ stack includes —

1. iCloud
2. Siri
3. Apple Maps
4. Apple Pay
5. Facetime
6. Find my iPhone/Find my friends.

This is the present. In the future, Apple wants to offer an array of entertainment products from original video to the news. They’re calling it the “Apple +”. All the services are designed with a core belief at heart. Apple’s services would —

• Be easy to use
• Have attention to detail.
• Be curated by experts.
• Be personalized.
• Be easy to share with the family.
• Keep your personal information private and secure (a must in a mobile-first world).

Let’s take a closer look at each one of them and try to eke out some sense out of it.

Apple News/News+

Leveraging the kind of vivid imagery we associate Steve Jobs with, Apple beautifully weaved the entire pitch into a single story.

Over 5 bn articles are read each month on Apple News. It’s now the #1 News App — Tim Cook.

It has managed to do this because the focus is less on click-bait headlines designed to garner clicks and revenues from ads and more on the content. The News+ aims to put news on a whole new level and take on journalism. It’s like a container agreement with 300+ magazines having something in it for everyone.

News+ subscription has an incredible design and collection of magazine covers packaged into a brilliant interface. Not only did the News+ tab look sleek and easy to navigate, but its design first format also provides an immersive experience and smart infographics optimized for mobile make it really enthralling.

Moreover, Apple’s central focus is on privacy. The News+ downloads the articles on your device and relies on the on-device intelligence for recommendations. Apple doesn’t know what you’re reading and therefore what you read on News+ won’t follow you across the web.

Users can also enjoy subscriptions like Techcrunch, The Schumm, Wall Street Journal, and the LA Times among many others. If you were to subscribe to them individually, it would cost you $8000/year. But Apple News+ comes at $9.99/month. Launching in USA and Canada first and following it up with Europe (the UK first) and Australia, they’ve clearly set the buzz.

Apple Pay/Apple Card

Apple Pay is one course to breach 10 billion transactions in 2019. Apple Pay is thereby the most simple yet most secure and private way to pay.

A lot of stores and merchants across the globe support Apple Pay. Especially in busy cities like London and Tokyo, people rely a lot on Apple Pay to pay for their daily commute and metro rides. To ensure the scalability of the Apple Pay, Apple launched Apple Card.

Apple Card is a beautiful product launched to address the friction points for the customers face with the current credit card experience. They aim to redefine the entire experience right from the onboarding. Unlike other credit cards, you don’t need to wait for months to get one. For Apple Card, you just need to sign up on your iPhone and voila, you get your card. It’s there on your wallet app. And if ever you were to change your address or edit personal information, you just have to text Apple and they’ll take care of the rest.

“We design products with the intent of being the best and that’s what we’ve done with Apple Card.” — Jennifer Bailey.

The Card surely looked spectacular built with Titanium. It’ll have your name etched on it and will not contain the details like CVV, Signature, Expiration date or Card number. Apple claims it is to make the experience more simple and convenient, setting new levels for privacy and security but avoided delving into the details as to how the card will function without the conventional features.

Apple Card also uses Color Codes to classify spendings and presents it to the user in the form of visual infographics. It also uses Machine Learning to make credit card transactions, which are very difficult to comprehend (or so they joked), more understandable.

They pack it up with incredible rewards system with “real” money, Daily Cash. There’s no upper cap on the amount you can receive as Daily Cash and you’re assured of getting 3% on purchases directly from Apple and 2% every time you use Apple Pay. This makes it an incredible loyalty program rivaling or even beating that of Amazon Prime.

Topping it up, Apple has a unique set of architecture. One can expect every transaction to be authenticated by biometrics/touch or face ID. Apple does all of this with on-device intelligence and not using Apple servers, thereby ensuring you keep your data with you.

They’re partnering with Goldman Sachs and Mastercard for this. For Goldman, this is more of a desperate move to stay relevant as its competitors like J.P Morgan are investing in Fintech Innovations (JP Morgan launched JPM Coin some time back). That being said, whether Goldman would be able to execute on the grand vision remains to be seen as this is the first time it is doing something like this.

All in all, Apple is taking on the Credit Card industry with Apple Card as a massive upgrade. However, it is important to note one key detail here — Apple Card has no plans to launch in India/China anytime soon.

While RuPay cards coupled with UPI payments eat up the major share in India, WeChat does the same in China. Maybe Apple wants to test it in other countries before trying something adventurous.

Apple Arcade

I analyzed why it makes sense for Apple to go after gaming here. Apple’s iOS is already the largest gaming platform in the world. It offers a collection of over 300k games for its 1 billion players.

However, not all games got equal traction. Some of them were FREE, ad-supported, and had in-app purchases while some required upfront payment. Developers found it very difficult to make money out of such games.

To address this caveat, Apple came up with Apple Arcade. It’s a new gaming service. The games on Arcade will have a new layer adding immersive experiences for the gamers.

This new platform will bring a new audience to gaming, as Apple terms it as the first-of-its-kind subscription which will transform gaming for Mobile, Desktop, and the living room. It’s a single subscription service which will bring in 100+ new and exclusive games on the platform. Just like all its other services, it’ll offer personalized recommendations and can be played with the entire family at no additional cost.

And if you’re a gamer, you’ll be delighted to know that you can continue a game from where you left it even after switching devices. All of these games will be available offline as well. Much like Apple’s services launched that evening, this also enhances the convenience. For Apple, it’s about selling convenience and then following it up by convincing.

Apple delved very less into the details hinting at this being a work under progress. Contrary to the beliefs of the loyal legion of Apple fans, I feel it’ll be naive to call it the future of gaming especially when we know the foray from Google, Microsoft, and Amazon is not too far away.

Apple TV/Apple TV+

Finally, after a prolonged period of speculation, Apple unveiled, what was its biggest push into streaming video. Apple terms it to be “the new home for world’s most creative storytellers featuring exclusive original shows, movies and documentaries”.

Apple also expects to spend ~$2 billion on original content. It does have $245 billion in cash. However, much like other services, it didn’t show any clips or trailers or teasers for many of the projects, understandably because most of them are still in the works.

Apple TV+ will be ad-free, on demand, and can be viewed both online and offline. Apart from pushing its originals, Apple also wants its TV app to be the centerpiece of a consumer’s various video subscriptions. Apple TV channels will let consumers pay for HBO, Showtime, Starz, and other services directly through the TV app and watch everything from there.

The TV app will also be coming on smart televisions starting with Samsung followed by Sony and LG.

Acting as a hub for video subscriptions isn’t an indigenous idea, however. Amazon has been down that road with Prime-Video Channels. Convenience is the new game here and putting everything in one place will help users monitor all their spendings.

Apple wants to be the future of TV and its execution will be relatively easier than Netflix/Prime Video as users won’t require a service to buy subscriptions. It can leverage its 1 billion users to make a mark here. The low barrier to entry is just one way of looking at it. Apple can and will also take a cut on each subscription it sells to its users which will be adding fire to its revenues from its services division.

This is paramount for Apple as it prepares for a world in which iPhone sales are flat.

Apple is that place where imagination amalgamates with technology. Humans want to be amazed and Apple does it just right. All the aforementioned services are new pillars which will augment Apple’s efforts into diversification. And packaging all of this in privacy focussed and affordable ecosystem just makes the audiences drool and crave more to be a part of it. It might prove to be a masterstroke in their up and cross-selling efforts, urging users to upgrade their devices to squeeze the best possible experience against their subscription fees (bang for their bucks).

Tim Cook is termed as an operational genius. He knows how to siphon out the maximum value from an entity while it’s in an ecosystem. Many argue he isn’t the ideal successor of Steve Jobs as he isn’t an innovator but Apple probably never wanted an innovator.

The billion users in the Apple ecosystem are among the wealthiest in the world. They have an enormous ability to spend on things which further stresses on their philosophy of selling convenience and privacy over anything else. Extracting the maximum value out of the billion users is Apple’s aim going forward and Tim Cook definitely knows how to extract that.

Among the Pandora’s box, the News+ service stands out to me. Maybe I am wrong, maybe the other services were just not ready for now and were rushed for a release yesterday.

What’s your pick?