IT as a Service — Apple Cloud Edition

Arastradero Creek, Palo Alto, CA
Apple Business Essentials


  1. Sell more iDevices, especially as iPhone shipment has been declining since 2015.
  2. To lock in more iDevice customers to bootstrap the Apple service business. This is not only a recurring revenue but also Apple service margin is 60+%, a 2x of that of Apple products.
  3. The enterprise market is pretty much untapped to Apple. Even Apple’s IT market share still grew from 5% to 6% between 2014 to 2015, it has been flat since.

Why small business?

  1. Small business is №2 in IT spending & the fastest growing section. Even Windows is still the most used in IT globally, it’s not the case in the silicon valley or tech. in general. iDevices are the weapon of choices in most startups & even big tech.
  2. A good fit to enhance Proter’s 5 forces for Apple. Small business has less barging power than Apple & better flexibility to accept Apple’s standard IT service. iPhone & iPad have been a big thread to substitute notebooks for productivity already. Subscription will lock in customers to reduce the threat of new entries & competition. Further scaling up of iDevice shipment reinforce Apple’s dominant barging power to suppliers.

Why IT as a service can be disruptive

  1. Is there a large population of people paying for professional services? Yes, most companies typically build dedicated IT teams if they can afford it. For a small company or a startup, paying for IT professional service make much more sense. A pain point: good professional service does not only cost a premium but is also difficult to get.
  2. Will the low-end market buy a low-cost but good enough service? Yes, small business IT service is the low-end market section to accept Apple’s standard IT service.
  3. Can a company profit from the low-cost service? Yes, Apple’s vertical integration of device, software & service not only provides a much lower cost structure than its competitors but also enables Apple to bing “new magic” to IT service.
  4. Is it a sustaining innovation of the current market leader? Arguably no, Apple is not just doing the existing IT model: personal computer + Web app combo. Which has been Wintel’s lead. Instead, Apple is on to the next generation of computing model: mobile device + cloud combo. Where the market is still everyone’s game. For example, Apple is not just bundled iCloud storage, but also provides an easy data backup service. Furthermore, Apple does so by a self-serving model. So anyone can easily manage device & deployment.
Apple Business Essential

Full Disclosure




A Taiwanese lives in Silicon Valley since 2014 & has random opinions on some stuff. The opinions shared here are my own, not those of companies I work for.

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Sam Lin

Sam Lin

A Taiwanese lives in Silicon Valley since 2014 & has random opinions on some stuff. The opinions shared here are my own, not those of companies I work for.

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