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Home / Business and Economy / Apple's Shift: Is "Good Enough" the New "Next Big Thing"?

Apple's Shift: Is "Good Enough" the New "Next Big Thing"?

Q: How is Apple's business model evolving?

Apple is shifting from selling exciting future products to managing its established user base and recurring revenue streams, with a growing emphasis on its services division.

29 Jan

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Summary

Apple transitions from selling dreams to managing a customer base.
Services now provide a significant portion of the company's profit.
AI is the next frontier, but Apple's strategy remains uncertain.

Apple's Shift: Is "Good Enough" the New "Next Big Thing"?

Apple appears to be transitioning from a company that once promised an exciting future to one that focuses on managing its established user base and recurring revenue streams. This shift is evidenced by its increasing reliance on its services division, which generated $82.3 billion in gross margin dollars in fiscal 2025 with a remarkable 75.4% gross margin.

The iPhone, once a revolutionary product, is now likened to an operating system, ensuring customer retention and ongoing monetization through upgrades and bundles. Despite strong sales for premium iPhone models, analysts question whether this reflects renewed consumer appetite or a late-cycle surge, especially with rising costs and a choppy global smartphone market.

China, a formerly crucial growth market, saw a 4% decline in net sales in fiscal 2025, primarily due to lower iPhone sales, despite promotional discounts. This highlights increasing pressure in a competitive premium market and the overall stagnation of the smartphone sector.