How Apple is positioning itself as an SaaS company – Apple World Today (2023)

With iPhone sales beginning to plateau, Apple is now focusing its attention elsewhere: ontheir software-as-a-service (SaaS) platforms— more commonly known among consumers as macOS, iOS, WatchOS, iPadOS, and tvOS.

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By selling staggering amounts of content and subscription services, Apple is successfully monetizing its software. In fact, Apple’s services division made a staggering$13.4 billion in profitsfor the second fiscal quarter of 2020.

1.5 billion active devices and growing

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After introducing the much-loved iPhone, iPad, Mac, iPad, Apple TV, and Apple Watch over the years, Apple now hasa record 1.5 billion active devices, with 900 million of those being iphones — in turn, massively boosting its popularity as a software platform and boosting financial gain. Indeed, selling services and subscriptions is an effectiveSaaS revenue model used to increase profits.

Each of these individual active devices uses an Apple operating system with easy access to the company’s services, as well as to the numerous third-party services Apple gets a kickback from. Specifically, Apple has recently revealed that iOS 13 and iPadOS 13 adoption has reached almost 80% for iPhones and iPads launched within the last four years. 70% of all iPhones are using iOS 13 (up from 50% in 2019), compared to 57% of all iPads, which has seen a 33% increase since 2019.

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A record number of paid subscriptions

As 2020 came to an end, Apple finally surpassed its target of reaching 600 million paying subscribers. The company now has 620 million in total — that’s up 140 million from just a year ago, with over 35 million added in the December quarter alone. Apple profits from both subscriptions to its own services and from third-party subscriptions. Apple takes 30% of third-party subscription profits in the first year, which reduces to 15% in the following years.

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Multiple new services

Apple already offers a comprehensive range of services, such as iCloud, Apple Music, AppleCare, and the App Store. More recently, the company launched four more services to better increase profits generated from its 1.5 billion active devices. Apple News+ is a subscription service in the Apple news app that gives users access to magazines and pay walled content from select news sites. Its monthly subscription fee costs users $9.99 (no annual subscriptions are currently available). Additionally, Apple Card is a credit card service powered by Mastercard and Goldman Sachs. It can be used for both regular and Apple Pay services.

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Their video streaming service, Apple TV+, costs $4.99 a month, and is free for a year with the purchase of an iPhone, iPod Touch, iPad, Apple TV, or Mac computer. Lastly, they also recently launched Apple Arcade, a video game subscription service, for just $4.99 per month. Apple’s dedicated efforts to increase their service offerings for eager consumers are certainly paying off: the company’s service revenue is on track to top$50 billion in profits before 2025.

For the time being, however, hardware still remains Apple’s main source of revenue. In its fiscal 2020 fourth quarter, Apple’s Services revenue increased from $12.5 billion in Q4 2019 to $14.55 billion, while the company reached an overall record revenue of $64.7 billion and $12.67 billion in profit. Nevertheless, as they continue to increase profits generated by their software platforms, Apple’s standing as a SaaS company will undoubtedly become stronger and stronger over time; their services now generate as much as 29% of the company’s gross profit. As such, it’s not unthinkable that in a few years, the company’s services gross profit may be near to overtaking its hardware gross profit.

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The accompanying image is courtesy of Unsplash.


Is Apple a SaaS company? ›

SaaS Comapanies Google, Microsoft, Amazon Web Services and Apple. Most of the world's largest and most valuable companies are or operate in part of their operation in the SaaS model.

Why do people buy Apple products? ›

One of the biggest reasons people love their Apple products is because they can actually get better with time. Every single year Apple drops a new version of iOS, giving iPhone users access to new features and updates free-of-charge. Apple is also great about supporting iPhones for the long haul.

How many countries are in Apple? ›

Apple has expanded the number of retail locations and its geographical coverage over the years, with 522 stores across 25 countries and regions worldwide, opening its newest store at American Dream Mall in East Rutherford, New Jersey on December 3, 2022.

What is an example of a SaaS company? ›

Examples of popular SaaS providers include: BigCommerce. Google Workspace, Salesforce. Dropbox.

What are two SaaS examples? ›

Examples of SaaS

Google Workspace (formerly GSuite) Dropbox. Salesforce. Cisco WebEx.

What is Apple's unique selling point? ›

Apple Computers, for example, is known for sleek, state-of-the-art design, user-friendly products, reliability, innovation, and being a 'cool' alternative to the PC. Zappos, the online shoe retailer, is known for free, no-hassle returns and excellent customer service.

What makes Apple different from other companies? ›

One of the greatest stuns used by Apple Company is innovation. The potential of Apple to produce its hardware, software, and other products brings the company at the top of the line. Each year, Apple launches new products with the enhanced predecessor, latest design and make the products more user-friendly every time.

What is Apple's strategy for success? ›

Apple business strategy consists of the following four elements: Focus on product design and functionality. Strengthening Apple's ecosystem. Improving consumer service experience.

What are the strengths and weaknesses of Apple? ›

Apple Inc's strengths include high brand identity, valued brand, leading innovation and technology, a brand of choice, competent research, and top-quality experience for its customer. Apple Inc's weaknesses include premium prices, incompatibility with other OS systems, and high dependency on iPhone and iPad.

What is Apple weakness? ›

Apple's Weaknesses
  • High Priced Products. Apple's products can be considered a luxury due to their premium prices. ...
  • Limited Advertisement & Promotions. ...
  • Entering into Area of Non-Competency. ...
  • Incompatibility With Other Software. ...
  • Allegations of Tracking. ...
  • Unfair Business Practices. ...
  • Integrate Stronger Parental Control Software.
4 days ago

What are the advantages and disadvantages of Apple? ›

Overall, apples are a healthy food choice, rich in fiber and vitamin C. But sometimes you can have too much of a good thing. Apples are high in sugar and may cause gastrointestinal distress. Pesticide residues are another possible concern, as are allergic reactions in some people.

Is Apple cloud SaaS or PaaS? ›

SaaS: Software-as-a-Service

Services that you consume completely from the web like Netflix, MOG, Google Apps,, Dropbox and Apple's new iCloud fall into this category.

Is Tesla a SaaS? ›

Tesla Third Row - Ross: Tesla becoming a Software as a Service (SAAS) Company. Tesla's tech opportunities seem endless. CEO Ross Gerber joins the podcast Third Row Tesla to discuss the reality of the car manufacturer becoming a Software as a Service (SAAS) Company.

Is Amazon a SaaS company? ›

AWS (Amazon Web Services) is a comprehensive, evolving cloud computing platform provided by Amazon that includes a mixture of infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and packaged-software-as-a-service (SaaS) offerings.

What considered SaaS? ›

What is SaaS? Software as a service (or SaaS) is a way of delivering applications over the Internet—as a service. Instead of installing and maintaining software, you simply access it via the Internet, freeing yourself from complex software and hardware management.


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