The March 2019 Apple event was the clearest signal yet that the company had accepted its hardware growth era was maturing and was betting its next decade on subscriptions.
In a single event Apple announced Apple News+, a magazine and news subscription. Apple Arcade, a games subscription. Apple TV+, a video streaming service. And Apple Card, a credit card built with Goldman Sachs that integrated with the iPhone and promised simplicity and privacy over the terms typical credit card products offered.
Four new businesses announced in a single afternoon. That is not a normal product event. That is a strategic declaration.
The iPhone numbers had been telling this story for a while. Unit sales were flattening. The upgrade cycle was lengthening as phones became good enough that the marginal improvement from a new model was harder to feel. Services revenue, which Apple had been reporting separately, was growing steadily and now represented a significant part of the overall business. The event was Apple making official what the earnings reports had already been showing.
Apple TV+ was the centrepiece. The company brought out a remarkable roster of talent: Steven Spielberg, Oprah Winfrey, Jennifer Aniston, Reese Witherspoon. The positioning was clearly against Netflix and the incoming wave of streaming competition. Apple was not going to license content, it was going to produce it and own it.
Apple Card was genuinely interesting as a product. The physical card had no number printed on it. The application was handled entirely through the iPhone. The stated commitments around privacy, particularly the claim that Goldman Sachs would not sell transaction data to third parties for advertising, were a direct contrast to how most financial products operated.
What struck me about the whole event was how much it depended on the installed base. Apple TV+ would not compete with Netflix on content library, at least not initially. Apple Arcade would not compete on game selection. The advantage Apple was selling was integration with hardware hundreds of millions of people already owned and trusted. That is a real advantage. Whether it is enough to build dominant subscription businesses on top of is a question that the years ahead would answer.