The news: Apple reported strong Q2 earnings last week, with revenues increasing 9% year over year to $97.3 billion. The strongest sector for the company was the iPhone category, which brought in $50.57 billion in revenues.
But the second most lucrative sector, “services,” brought in $19.82 billion (more than any other product category) and grew 17.72% year over year—a sign that the company once known primarily for its products and branding has undergone a shift to focus on subscriptions and services.
How we got here: When did Apple’s pivot to media begin? A recent excerpt from New York Times reporter Tripp Mickle’s upcoming book about Apple’s transformation ties the shift away from hardware to several executive departures following the death of Steve Jobs—particularly of Jobs’ long-time partner and product designer Jony Ive.
The benefits: Apple may have shifted its focus away from the products that built its legacy, but the focus on content has also helped it escape some of the pain from supply chain issues and inflation that have plagued other tech hardware companies.
Looking forward: Apple’s choice to make subscriptions and services a larger part of its business doesn’t mean it has to lose the deliberate branding which helped it become the biggest company in the world.