Every company wants to diversify beyond its core business. No, that doesn’t mean McDonald’s should start selling used cars in the parking lot, but it does mean the company has moved well beyond hamburgers, fries, and a shake.
Some technology giants are giant conglomerates made up of many moving parts that contribute to the whole. Samsung is one. Google is not. Amazon is not. Facebook is not. Even Dell, HP, Lenovo, and other major brands fail at diversification in the same way Apple has mastered the need to expand, grow, and balance.
Apple has achieved a holy trinity of diversification. When co-founder Steve Jobs returned to Apple in 1997, the company was in dire straights; dangerously low on cash, bleeding cash, and trying to sell too many products that did not make money.
Diversification is easy. Making money at it is the challenge. Back in the last century, despite dozens of products, Apple was the Mac. The Mac and Apple were synonymous. Today, the Mac itself is a growing hardware platform but surpassed in many ways by other products.
Sure. Hardware. Software. Services.
Hardware includes major products; Mac, iPhone, iPad, Watch, AirPods, Beats headphones, HomePod, and others. Software? iOS, macOS, et al are key differentiators even if they are bundled with hardware. Apple’s own homegrown software runs the show, albeit in the background.
Services is not the new kind on the block, not the biggest revenue stream (iPhone still rules), but has emerged as the new source of growth even while the hardware customer base growth has slowed to a trickle. Services revenue and profits top iPad and Mac.
Apple’s Special Event signaled that to Apple, Services are now part of the holy trinity of the company’s business.
Apple TV+ brings more revenue from a growing customer base, and clear differentiation from other hardware manufacturers. Apple News+ offers a growing revenue stream while bringing customers a more clearly defined method to manage the information superhighway without venturing into the dark alleys.
Wait. There’s more.
Apple Arcade is the company’s ambitious subscription-based enhancement to the world’s largest game platform. Apple Card is yet another perk for customers who join the Disneyesque-like ecosystem. No fee. Easy financial management. Privacy and security.
Hardware. Software. Services.
If that’s not a holy trinity of successful revenue, profits, and key differentiation from competitors, I don’t know what is.