Everyone’s asking Google about Apple One, analyst says
Services, services, services, and the service that seems to be picking up a good deal of traction since the introduction of the iPhone 14 series of devices seems to be the Apple one service, Apple One.
Everyone wants to know about Apple One
Morgan Stanley Apple analyst, Erik Woodring has shared a series of client notes looking at Apple. Among other take aways, he warns that reports of changes in iPhone production are more bark than bite, pointing to the fact that higher ASPs and the fact that sales seem set to stay level with last year still suggest healthy revenue at the company.
It’s all interesting stuff, but one thing really stands out.
Woodring has noticed that Google searches for Apple One have increased 90% globally and over 200% in the US since mid-July. Indeed, he points out, the Google Search index data for Apple Once is now at the highest level it has been since the service was originally introduced in late October 2020.
*Editors note: OK, this is many, not everyone, but many is still quite a lot.
What does this mean?
I suspect it means people are becoming more interested in the service. They are considering holding back on some purchases, the reputation of Apple TV is improving, they see Apple Music as a viable alternative to Spotify and as they and their mates become more involved in Apple’s ecosystem they are becoming more willing to give its services a chance.
Not only that, but at the high end they get data, news and a fitness class they can do at home.
There ar also the bundles to consider. Both Verizon and EE are now offering Apple One in some way to customers, on which the analysts wrote: “While these offers could be the factor supporting the rise in ‘Apple One’ search intensity, we also believe this uptick more broadly signals increased traction of the bundle with Apple users.”
The impact?
Apple One will help maintain services revenue, particularly in the App Store and digital advertising, but, more importantly, will build ARPU and subscriber counts. I would add that this is even as Apple prepares to turn all these customer connections into platforms from which to build its next big thing.
Woodring speaks sense I think. After all, shortly after Apple One shipped, MiDIA analyst, Mark Mulligan pointed out
“Apple One is well placed to weather the recession. Bundles may not be recession proof – after all, entertainment is a nice-to-have, no matter how good the deal – but they are certainly recession resilient.”
Here’s why it works
Or, as Needham’s analyst Laura Martin pointed out after Apple One appeared:
- Services make its ecosystem sticky and helps keep customers on Apple.
- They also increase revenue per user, which means Apple makes more money.
- Services also boost revenue growth, in part because they offer 67% margins in contrast to the c.30% the company makes on hardware.
Drinks all round! Here’s Apple CEO Tim Cook having a stein with services head, Eddy Cue in Germany.
Schee, dass ma wieder amoi gmiadlich zamsitzn. So happy to be back to Oktoberfest. Prost! pic.twitter.com/AcPy8ugH9v
— Tim Cook (@tim_cook) September 28, 2022
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