The news of Apple's revenue reduction by 5 percent in the final quarter of 2018, the first since the company introduced iPhones in 2007, surprised investors and industry insiders. However, the CEO Tim Cook had already been working for months to review the strategies for the future of Apple, starting first from several changes at the top of the company.
The executive changes are part of the company's broader choice to break away from its reliance on iPhones, the production of which has been Apple's main source of revenue for years. In the last year, however, the sales of the iPhones have suffered a significant slowdown, especially on the Chinese market. The smartphone industry has been experiencing a period of crisis for some time, with people who tend to keep their phone much longer, before replacing it with a new model, or prefer to buy cheaper models, such as those from Chinese companies. Although Apple produces devices of various types, from computers to tablets, its “iPhonecentrism” in the long run has proved to be a problem.
For this reason, Tim Cook has in mind a future in which Apple will produce fewer iPhones and invest more resources in services and technologies. To get there, he decided to change some of the company's top executives, for the first time since becoming CEO in 2011. The first new executive to join the group of 11 who join Cook in running the company was John Giannandrea, who had previously worked at Google and who was hired by Apple last April and placed in charge of the project development sector. of artificial intelligence. Giannandrea was promoted to senior vice president, taking over from Bill Stasior as head of development for Siri, Apple's voice assistant.
In February, Apple announced that Angela Ahrendts will also step down from her executive role next April: since 2014, she has headed the sales department, whose post will be taken by the current head of human resources, Deirdre O'Brien. Another important change involved the department that dealt with the development of self-driving cars: after investing a lot of time and a lot of resources, Apple gradually abandoned the so-called “Titan” project and fired 190 people who worked there, preferring to concentrate the its efforts to create entertainment services that can compete with movie and TV series streaming sites.
At the helm of this new project was Eddy Cue, who heads the division that deals with software and services and who had been at the head of “Titan”, with the aim of creating a streaming service that can compete as soon as possible. with Netflix, Amazon Prime Video and other large companies that have been active in this area for many years. Apple arrives very late, having preferred in recent years to concentrate its resources on a physical device, the Apple TV, and not on a service accessible to everyone from a computer or a smart TV.
To make up for it, Apple has already invested a billion dollars for the creation of new original television products, which should be presented next March 25 during a special event scheduled at the Apple Campus in Cupertino, California. According to the first rumors, the streaming service should be available, at least in the United States, as early as April, but it is not yet known how it will work and how much it will cost: according to the Wall Street Journal it will be included in a monthly subscription that will also include storage space. on the cloud, while for CNBC it will be free for owners of an Apple device.
Next to this project there is also the so-called “Netflix for news”, a paid service for reading articles from various newspapers on a single platform. The service, initially available only in the United States, is expected to cost around $ 10 a month, but so far it has met with resistance from several US publishers, who don't like the idea of Apple keeping half of the revenues for itself. Even this, however, would be part of Tim Cook's new strategy to expand the digital services offered by Apple, to fill the hole left by the lack of iPhone sales.
Currently, iPhone sales make up about two-thirds of Apple's total sales, but revenues from digital services – such as subscriptions to the Apple Music music streaming service, iCloud, App Store purchases, and Apple Pay – are on the rise. , and for the future they are expected to increase further. By 2020, Apple hopes to raise $ 50 billion from the sale of digital services, and these are expected to contribute 60 percent of the company's revenue over the next five years, a remarkable figure even compared to the huge sales of digital services. iPhones in the past five years, which accounted for 85 percent of Apple's turnover.
