Apple’s service sector has shown steady growth in recent years, but analysts still believe Apple’s non-hardware business is at a moderate level and still has more room for improvement.
According to the “Apple Services – Not as Dominant as Apple Hardware” report released by Consumer Intelligence Research Partners (CIRP), it is pointed out that the market penetration rate of Apple’s service business has not met expectations.
Market Penetration In marketing, it refers to the degree to which the market is popularized by a product or service. It represents the degree of coverage of a product or service in the market. It is expressed as a percentage, and the formula is as follows: Market Penetration = Existing Demand for Goods / Potential Demand for Goods.
CIRP said that from the report, many consumers regard Apple as a hardware manufacturer. The report pointed out that the market penetration rate of paid iCloud cloud storage is as high as 60%, but the penetration rate of some Apple Care subscription options is less than 4%.
The most successful element is paid iCloud storage, which combined with iPhone, iPad and Mac usage makes it “relatively immune to competing services.”
Apple’s extended warranty, AppleCare, was the least successful, with only 4% of iPhone and 7% of iPad customers paying for it. CIRP believes this is due to “numerous competitors in the extended warranty market” and the advantages that mobile carriers, among others, have in selling iPhones and their services.
Among Apple’s other services, only one-third of Apple users use Apple Music. To thrive in a market as mature as streaming music, Apple “needs to convince customers to drop their existing services.”
Apple TV+ lags behind Apple Music at 28 percent penetration. Again, stiff competition is an issue here, but since each service has its own original content, there are more opportunities for consumers to pay for multiple services.
About a fifth of Apple users subscribe to Apple News; more than a quarter of Apple users subscribe to Apple Podcasts. Each company faces stiff competition, with Apple News competing with “a broad range of national and local news outlets” and Apple Podcasts competing for head-on with Spotify.
