For the most part, while Apple offers Apple Music, competitors only offer Spotify, a situation that generates far less revenue for them. That lack of successful monetization in terms of attached income across the customer base meant less when the PC market was growing, but in an environment buffeted by multiple business challenges it becomes a vulnerability that cannot be ignored. It exposes the inherent weakness of a strategy in which hardware manufacturers rely on third parties for operating systems and services, as the lion’s share of income doesn’t reach those hardware makers.
You can go your own way
There’s little doubt that part of the reason Apple is in such a strong position is because of its highly strategic outgoing CEO, Tim Cook, who led efforts to build a strong services business, accompanied by a wide ecosystem of complementary accessories. You don’t just buy an iPhone, you buy a Mac, AirPods, and Apple Music. You don’t just get an iPad, but you likely also acquire Apple Arcade.
To a great extent, Apple’s strength now owes a big debt to the many years in which the company was marginalized. Forced to follow its own path, Apple deliberately developed its own unique platform-based approach. That approach meant the company remained profitable even when it held just a few percentage points of the PC market; as its market share improves, we can also see its profitability climb.
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