We’ve been banging on about how your iPhone will be your wallet one day, and we’ve taken many a look at credit card processing systems preparing themselves for launch for the device – but now it looks like we may have missed a trick, at least according to former leader of Mac development and founder of the Be OS, Jean-Louis Gassée.
In his latest report on CBS, Gassée notes that with the iPhone and, to a lesser extent, the Apple TV, Apple has moved toward a whole different business plan, as a service provider rather than hardware maker. Bear with us, we know this is hard to see, and this is the tech exec’s opinion.
“Until recently, Apple’s profits were built on hardware sales. Everything else, system software or iTunes music revenue only mattered as a way to buttress hardware profits. For example, when iTunes came out, analysts expressed concern that music margins were thin or negative. So what? iTunes’s sole role is to prop up iPod and iPhones margins. Apple talks up its software, operating system and applications, spends hundreds of millions of dollars in development and generates modest or no direct revenue from it. It’s all in the service of Mac and iPhone sales and profit margins. That’s the picture so far, fast becoming the past,” he writes.
“With the iPhone, Apple hasn’t just broken into a new product category, it has shouldered its way into a new world of service revenues.” The former Mac chief then breaks out a few numbers, revealing that iPhone sales generate in the region of $850 in service revenue.
Gassée then moves to look at the micropayment systems which already underline iTunes. “Apple has developed an infrastructure,” he writes, observing that a future Apple tablet could be developed into becoming the “channel of choice” for entertainment.
“Apple could become a distributor and micro-payment agent for goods and services going way beyond you can get on an iPhone, think screen size, or a MacBook, think everyday mobility/ubiquity, weight and size,” he writes.
Gassée also observes that former Apple ally and now new competitor, Google, is moving into the same direction, hoping its Chrome/Android OS for netbooks and smartphones (respectively) will help it pump its intelligence into these devices, and hopeful it will then be able to gain business through the offering of similar services.
The former Apple executive also slams Google CEO, Eric Schmidt, to resign from Apple’s board last week, saying it’s long overdue – he should have gone when Google introduced Android…
It’s a fascinating read – go get it….
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