Wait! What? Apple has a new business? When did that happen? Well, Apple is something of a secretive company that does not pre-announce everything it does, right? Why would the company pre-announce a new product line worth tens of billions of revenue?
First, let me recap what we know of Apple Inc. The big dawg is iPhone, a once-in-a-lifetime product that may be on a revenue flatline but hasn’t flatlined yet. iPhone remains half the company’s revenue. What else?
Second, of course, is the rapidly growing Services business– App Store revenue, Apple Music, and everything else that generates money but isn’t hardware. One thing to remember about Services, though– it’s highly dependent upon a growing customer base which uses hardware.
Apple is still a hardware company first.
Third is the Mac; a product line that once was synonymous with Apple Computer Inc. Mac, Apple, same thing. If you thought the PC industry was dead, well, try to remember that this past year was the Mac’s best revenue year ever.
Not bad for a dying industry, huh?
Next is iPad, another hardware product that fell on lean times because Apple was too busy counting revenue and profits and didn’t bother updating Mac or iPad for a few years. Those days have changed. The iPad is a PC now.
Finally, Apple’s newest revenue stream and the 5th leg in a tall bar chair. Wearables.
Wearables? If you can wear it, it’s a wearable. Apple sells plenty of Watches, AirPods, and Beats headphones, among other accessories in the same classification, so Wearables is the new darling until Apple can figure out what the next insanely great thing will be.
I think wearables has legs (pun intended).
Watch could grow into a massive product with the ability to capture blood pressure or blood glucose readings. Apple Glasses could be like iPhone on your face and that means even more accessories tied to your iPhone.
My prediction is that within the next year or two Wearables will be a bigger product than Mac or iPad. That’s big and just another big, fat leg on a tall bar chair that makes Apple the world’s largest technology company.
Just remember the basics. Apple is a hardware company and needs customers to sell Services and Wearables.