Apple and Good Enough Services

With yesterday’s announcement that Apple is having a media event on March 25th, and the likely hood the event is largely focused on services, I thought it would be good to make some broader points about Apple’s services for us to chew on leading up to March 25th’s reveal.

I have attended nearly every Apple media event since 2001. What intrigues me the most about this one, is it will likely be the first where the entire focus and emphasis is on something other than shiny new hardware. Yes WWDC is a software event, but that is also a developer event, not a media event. Media events are traditionally where Apple releases new hardware products and the software, or services, and story is the supporting cast. This event is likely to be quite different. The event invite is about as clear as it gets saying “It’s Showtime.”

As I had to clarify for one reporter, no Apple is not buying Showtime. However, as I’ve explained before, I do feel what Apple is looking to do with their original content strategy is likely to be closer to Showtime and HBO than Netflix or Amazon Prime. But, as I noted above, the focus of this event being on a service or services, and the hardware now becoming the companion story is a fascinating shift.

I’m not saying Apple won’t release any hardware as there have been rumors of iPad Mini refresh and AirPods 2, but that for this event hardware isn’t the focus, and that is a new thing for Apple.

Benchmarking Services
Truly understanding Apple’s intent and strategy with services is the root context we should focus on. I continually try to add to the public debate on Twitter and even with Wall St. that Apple is not becoming a services company, but that services is now becoming a solid third leg of Apple’s hardware, software, and services stool.

Something I’ve been thinking about recently is how to measure the success of Apple’s services, individually, and the challenge it poses for many who are used to measuring the quality of Apple’s hardware and not much else (perhaps beyond some OS features). Customer satisfaction is a little tricky when it comes to software, but that has been a bar Apple has used to publicly demonstrate their laser focus on the customer is paying off.

Similarly, we have to believe Apple’s customer-centered focus will apply to services, but we are yet to have a reasonable bar in which we can hold Apple accountable when it comes to services. I make this point because I worry that Apple may take a good enough approach with first-party services in the same way they take a good enough approach to first-party apps. Let me clarify this point as not to ruffle too many feathers.

When I think of Apple first-party apps, I think of Mail, calendar, Notes, etc. I could throw iMessage in there, but we should debate whether iMessage is categorized as a services or app first. More on that later. My point about most Apple first party is apps is they are good enough but not best in breed. To a degree this is intentional. Apple likes to let its developer ecosystem flourish, and they applaud developers who create better apps than their first party ones because it means success for their ecosystem. But Apple also know, most customers will use the default first party apps they provide and while those apps are usually more than sufficient, they can get away with being good enough because that is all most of their customer need. And there is always the opportunity to get something better if you so choose.

However, I”m not sure this same approach can and will work with services. Hopefully, Apple agrees, but in order for us to truly benchmark this and benchmark Apple’s services against others, we may need to think through how to do so in a deeper fashion.

The Case Against Good Enough
There are a few important points on the theme of good enough I want to emphasize. The first has to do with Apple settling for good enough services, puts their privacy stance at risk. What I mean by that is, if their services are not the gold standard, and the bar in which to be measured (like their hardware) then Apple runs the risk of losing customers to companies who may not have the privacy of their customers in their best interest. Here is one brief anecdote just to make my point.

I’ve already noticed a significant number of friends and family moving to Google Photos and away from Apple Photos. While the reasons vary greatly, I was shocked at how many people I talked to that are very deep in the Apple ecosystem but who vetted Google Photos and concluded it was better than Apple Photos. Now we all know Apple pits Google as one who is in the wrong side of the privacy camp, yet Apple Photos not being the gold standard has risked Apple customers gravitating to a service which they feel is better from someone Apple feels is a bad actor. Whether Google is or not is still an important debate but given they monetize via ads, and harvesting consumer data is part of that, the point remains.

Perhaps another point to consider is voice assistants, and search to a degree. The latter being the most interesting because Apple has no play in search, and a business deal with Google for default search on iPhone, so by default, Apple is already tolerating (is that the right word?) giving their customers to Google in one of the most significant internet behaviors which is search. I don’t see any real way around that because most consumers find a lot of value in Google search, despite what is happening with their data. I acknowledge Apple has done some things by default in Safari around Google search like turning off location tracking by default, etc., and those are good tradeoffs, but the overall point remains.

Siri vs. Google Assistant is another interesting one. It is no secret that Siri lacks Google Assistant in a few key areas, but that Apple is able to out-integrate Google when it comes to iOS and therefore Siri is still the more convenient even if it isn’t the best. But I’m not sure this can continue. If Siri is simply the best integrated with iOS but not the best overall, I’m not sure that alone can keep more customers to moving to Google Assistant as the voice interface era keeps progressing. And this then leads me to my last point.

Apple’s advantage will always be integration. With any service they release a key part of its value will be its tight integration with Apple hardware and software. This will always be Apple’s advantage when it comes to their ecosystem. But, I also think Apple has gotten away with good enough apps/services because the convenience of integration often presents the appearance of better service than may actually be the case. Perhaps I’m selfish, but I want my cake and to eat it too. I want Apple to have the best of any service they release, better than any competing service, AND I want the benefit of that service deeply integrated into the Apple ecosystem. That is the bar I hope they strive to hit and one I hope we can objectively measure so we help keep Apple at their best.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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