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Apple’s transition from a hardware based company to a service based company

American multinational technology company, Apple Inc, is one of the world’s largest tech giants and proudly stands at a market capitalization that is valued at $2.25 trillion is a company that is predominantly into offering technological products and devices has been making its foray into the services segment.

Apple over the past few years has ventured into providing cloud services, application store, music, news, software, streaming shows, movies and TV, Apple care, video gaming, Apple pay, podcast platform, advertisement etc.

In the beginning of 2017 Apple had announced that they would be doubling their income from services hopefully by the end of 2020. Which ended up being the pandemic year and in a way this pandemic helped them achieve the set targets for this transition.




Apple’s services business segment is valued at $502 billion as of 2019, which is a little higher than its hardware segment that is valued at $398.8 billion which is a sign of its successful transition.

Apple’s revenue from its services business segment saw a rise from $9.9 billion in 2018 to $11.5 billion in 2019. The services segment of their business contributed at least 17% of the total earnings for the same year.

Few months into this year the giant’s services revenue crossed $16.9 billion for the first quarter this is up from the $13.3 billion during the pandemic year. The company even reported that they have acquired over 660 million paid subscriptions across all its services verticals for the 1st quarter of this year which has been their best yet.



The main reason for the shift is that the company has been seeing a drop is their hardware sales for year on year basis due to rising competition and their failure to maintain reasonable pricing policies is certain markets and segments.

They are focusing on long term sustainability through diversification of risks and generating alternative sources of income. Looking at the way things have been speeding up for Apple their aggressive operational strategy has definitely ensured that they have sealed the deal for the oncoming future.