Mark Gurman has released another of his articles on Bloomberg, but this time not to unveil Apple’s plans. The well-known specialist has commented on the evolution of the company’s services division, drawing the conclusion that “they have had a slow start”.
Apparently, and always based on recently calculated estimates from Bernstein, the services division grows but still depends a lot on the App Store to achieve it. Services like Apple TV +, Apple Arcade and Apple News + are growing, but at a slower rate than in theory.
The App Store and Google (yes, Google) as responsible for the growth of services
In fact, according to the data provided by the source, curiously, the second source of income in services by Apple is the money Google pays for being the default search engine on the platforms of the bitten apple. This is followed by revenue from AppleCare, the official warranty and repair service.
This means, roughly speaking, that the entire wave of new Apple services (TV +, Arcade, News + …) has not yet grown sufficiently and is still dependent on the growth of the App Store. In fact, Bernstein provides the fact that Fewer than 15% of customers who can do so have not activated the Apple TV + Free Year they get when they buy an Apple product. At this point I can comment on the basis of my own experience that there are many people among the general user who do not even know that the offer exists. Most activate it when they realize it, although some people prefer not to do it for fear that there will be no notices when within 12 months it is time to start paying.
Anyway, Gurman’s intention is not to be pessimistic. Apple’s services division has a lot of room for improvement and growth for the future, and the new offerings are simply not growing as expected. Since Cupertino they are already moving to improve that, with changes in the hiring of games for Apple Arcade and negotiations to release more movies like ‘Greyhound’ on Apple TV +.
The day after tomorrow, between 22:00 and 23:00 in Spain, the financial results press conference of the last fiscal quarter. It will be then that we will see the global growth of this services division and we will check if these estimates reflected by Gurman were too pessimistic or were correct. It will be a complicated event, because the global pandemic will undoubtedly have affected sales strongly.
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