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Apple Event: services take centre stage

Jasper Hart
September 17, 2019

iPhone 11 pricing round-up

Cupertino giant has focused heavily on its services business

Apple’s new iPhone took a back seat to its new services at its most recent Apple Event in September, according to analysts.

The iPhone 11, 11 Pro, and 11 Pro Max offered improved camera and battery specs to consumers, but much of the vendor’s focus was on combining its hardware and its TV+ and Arcade games offerings.

“For once, the iPhone wasn’t the star of the show,” said CCS Insight chief of research Ben Wood.

“Aggressive pricing of $4.99 for TV+ and Arcade, and bundled TV+ subscriptions with new product purchases underline Apple’s service ambition as it drives towards service revenue of around $50 billion in 2020. The iPhone is the foundation for growth in services as much as it’s the engine room of revenue and profit.”

GSMA head of intelligence Peter Jarich added: “The services category continues to grow as a contributor to Apple’s sales, at more than 30 per cent of sales in April to June 2019.

“That makes the ecosystem and everything supporting it more important than any single product category. The Apple Event was about driving more and more people into the Apple Ecosystem.”

The range’s improved battery life was seen as an integral part of this. “Keeping people using their devices for a longer period of time only helps to drive the adoption of Apple services,” said Jarich.

The phones’ lack of 5G capability was, meanwhile, not considered a surprise.

“It’s still early days for 5G,” said Wood. “Given people’s loyalty to iPhone, if they really want 5G they’ll probably just wait until Apple does support it.”

Kantar WorldPanel director of consumer insights Dominic Sunnebo added: “Apple shows an understanding of consumer pushback against the steep price rises over the last few years, but also an acceptance that without 5G capability there is very limited scope to push prices up further; this will need to wait until the back end of 2020.”

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