There have been two reports in the past few days pointing to different paths for Apple to generate more revenue by increasing revenue from services.
In my view, it should really be done the first time, but not the second time – and it seems that Phil Schiller might agree…
Let’s start by summarizing the two reports.
Home monitoring and security services
on friday, Bloomberg Suggest that Apple may be planning new home security and monitoring services to sit alongside some of the new home hardware we’re expecting.
Apple is planning privacy-focused home security cameras and automated devices that will use AI to monitor the environment instead of actual video. It will tap into new home security and monitoring services.
Squeezing more revenue from the App Store
A second report from the same source on Sunday said the company is looking for ways to squeeze more revenue and profit from the App Store.
Ternus and Head of Services Eddy Cue want to make more money from the App Store and find ways to increase margins and squeeze recurring revenue from the platform.
Apple should not use the last method
Dealing with these in reverse order, I think the second approach would be a very big mistake.
Apple’s powerful monopoly on iPhone app sales has come under fire from regulators around the world. In most countries, if you want to sell iPhone apps, you are forced to do it through the official App Store, and that leaves you with no choice but to accept the company’s terms on a take-it-or-leave-it basis.
I understand the general view is that no one is forcing anyone to buy an iPhone or create an app for it, but that is not the reality of the way capitalism works: even the United States has antitrust laws since 1890. When you reach the level of market dominance, so restrictions are imposed on the way you want to do your thing.
Trying to squeeze more money out of the App Store is the opposite of skating to where the puck is headed, and Phil Schiller reportedly shares this view. Bloomberg Pointing out that it is one of the reasons why he resigned from his position at this time.
On the other hand, Schiller seems to believe that such a move will further frighten developers and governments. While there is no internal explosion or anything like that, it is something that he does not want to be a part of.
Service innovation is the way to go
Introducing new services that people want to buy, on the other hand, is exactly the right thing for Apple. I can easily see the value in a home security inspection company.
I argued back in 2024 that building your own smart home camera would be one of the smartest things a company could do. I said the same again about the rumors about the smart bell Apple. Adding an optional service component to a security product makes perfect sense for two reasons.
First, there’s all the privacy arguments I’ve made before. HomeKit Secure Video has already made a big contribution to ensuring the privacy of security camera feeds. If there’s one company I trust in AI analysis of security cameras, it’s Apple.
Second, of course, Apple is best positioned to fully integrate security hardware and services within the HomeKit environment. I’m sure there are many other areas where Apple can offer similar benefits.
To me, the key is that Apple wants to take the same approach to services that it does to hardware. Make great products that lead to people willing Parting with their money and doing so with a smile on their face. Don’t squeeze money in a way that irritates customers, developers, and moderators alike.
What do you have to say about this? Please share your thoughts in the comments.
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