It\u2019s not every day that software licensing makes the evening news. But last week, Apple hosted\u00a0<\/span>a major event\u00a0<\/span>where they rolled out a new iPhone\u2014and a bunch of new subscription services, from streaming television to games.<\/p>\n Apple\u2019s services business is growing\u2014fast. It\u2019s\u00a0<\/span>on track\u00a0<\/span>to double from 2016 to 2020 and\u00a0<\/span>investors believe\u00a0<\/span>Apple could see $50 billion in annual services revenue as soon as a year from now.<\/p>\n Perhaps the most interesting thing in all of this is that Apple has dropped the price of its signature hardware\u2014the iPhone, from $1,000+ to $700 for the entry-level model. That\u2019s a 30% drop in hardware pricing, while investing heavily in software and services.<\/p>\n Apple\u2019s move might lead you to wonder what all of this has to do with you? How can your company get into the subscription, recurring revenue wave that seems to be taking over, especially if you are, or have been, a hardware-centric business? There are some lessons to be learned from Apple\u2019s move from hardware to software that might be more relevant to you than you thought.<\/p>\n 1) Selling one-off hardware isn\u2019t enough.<\/b><\/p>\n Apple\u2019s iPhones have been a gold standard for years now, boasting some of the best technology, with sky-high prices to match. And yet, sales have started to\u00a0<\/span>drop off\u00a0<\/span>as the market has become saturated. They\u2019ve had to find another option, as in today\u2019s world,\u00a0<\/span>hardware isn\u2019t enough.\u00a0<\/span><\/i>Apple launched their\u00a0<\/span>Upgrade Program\u00a0<\/span>and moved customers from a single purchase to monthly purchases, essentially transitioning them from being owners to renters of devices.<\/p>\n 2) Subscription options benefit companies and customers.<\/b><\/p>\n Even Apple\u2019s most loyal customers wouldn\u2019t buy a new iPhone multiple times a year, when new models are only released once a year. That put a severe limit on the company\u2019s ability to\u00a0<\/span>upsell and cross-sell\u00a0<\/span>to even their most loyal fans. Especially as prices crept up over $1,000 per device, customers\u00a0<\/span>held onto their devices\u00a0<\/span>for longer.<\/p>\n By offering a subscription model for their hardware and rolling out additional services options, Apple ensured secure monthly revenue for the company. At the same time, they are providing customers an improved experience through both their expanded services, and equipment that is constantly upgraded with minimal expense and inconvenience. 3) Moving to a recurring revenue model isn\u2019t simple.<\/b><\/p>\n Even Apple, one of the biggest and most successful companies in the world, has done it slowly, starting with Apple Music and iCloud storage, moving into Apple News, and now to Apple TV+, Apple Arcade, and more.<\/p>\n While analysts are noting the services could cost customers upwards of\u00a0<\/span>$100\/month\u00a0<\/span>when all is said and done, Apple isn\u2019t making sudden moves to even offer a bundled service. If they\u2019re moving slowly, you probably should, too.<\/p>\n Transitions are hard, regardless of the industry you\u2019re in. As the world moves towards \u201cas a service\u201d models, more and more companies are being forced to keep up or risk being left behind like the taxi drivers wondering how Uber outwitted them. To learn more about\u00a0<\/span>how software is powering the hardware renaissance,\u00a0<\/span>download our groundbreaking report.<\/p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":293,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/www.software-monetization.com\/sg\/wp-json\/wp\/v2\/posts\/287"}],"collection":[{"href":"https:\/\/www.software-monetization.com\/sg\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.software-monetization.com\/sg\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.software-monetization.com\/sg\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.software-monetization.com\/sg\/wp-json\/wp\/v2\/comments?post=287"}],"version-history":[{"count":5,"href":"https:\/\/www.software-monetization.com\/sg\/wp-json\/wp\/v2\/posts\/287\/revisions"}],"predecessor-version":[{"id":372,"href":"https:\/\/www.software-monetization.com\/sg\/wp-json\/wp\/v2\/posts\/287\/revisions\/372"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.software-monetization.com\/sg\/wp-json\/wp\/v2\/media\/293"}],"wp:attachment":[{"href":"https:\/\/www.software-monetization.com\/sg\/wp-json\/wp\/v2\/media?parent=287"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.software-monetization.com\/sg\/wp-json\/wp\/v2\/categories?post=287"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.software-monetization.com\/sg\/wp-json\/wp\/v2\/tags?post=287"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Here are our top takeaways:<\/h2>\n
They\u2019re called Apple, but it looks a lot like turning lemons into lemonade, from where we\u2019re sitting.<\/p>\nDon\u2019t Get Uber\u2019d:<\/h2>\n