Some might argue that Apple TV has “failed,” in the sense of not being a leading video streaming provider in terms of market share.
But companies in the same industry often have very-different business models, and often, some revenue-producing segments of those businesses exist in large part to support the core revenue model.
Apple TV, for example, arguably exists to support Apple’s core hardware sales model. Microsoft’s videogame business arguably is used to support the firm’s hardware sales. Amazon’s streaming video service is a way of driving subscriptions for Amazon Prime e-commerce services.
Also, some might argue that streaming also contributes to the “services” revenue streams that most believe are the key to Apple’s future growth.
Business Model
| Core Revenue Model | Supporting Products/Services | Examples
|
Hardware Sales | Selling physical IT equipment | Personal computers (desktops, laptops) - Servers and storage Networking equipment (routers, switches) - Mobile devices (smartphones, tablets) | Dell Technologies (DELL) - HP Inc. (HPQ) Apple (AAPL) |
Software Licensing | Selling licenses to use software applications | Perpetual licenses (onetime purchase) - Subscription licenses (monthly/yearly fees) Open-source software with paid support plans | Microsoft (MSFT) - Adobe (ADBE) Red Hat (RHT) |
Software as a Service (SaaS) | Subscription-based access to cloud-hosted software | Web-based applications (CRM, project management, email) - Scalable and flexible deployment options - Integration with other cloud services | Salesforce (CRM) - Zoom Video (ZM) - Dropbox (DBX) |
Platform as a Service (PaaS) | Providing a platform for building and deploying applications | Development tools and frameworks - Infrastructure and services (compute, storage, databases) - Integration with other cloud services | Amazon Web Services (AWS) - Microsoft Azure (MSFT) - Google Cloud Platform (GOOG) |
Infrastructure as a Service (IaaS) | Renting out virtualized computing resources | Servers, storage, networking - Scalable on-demand resources - Pay-as-you-go pricing model | Amazon Web Services (AWS) - Microsoft Azure (MSFT) - Google Cloud Platform (GOOG) |
Managed Services | Providing ongoing management and support for IT infrastructure | System administration - Network monitoring and security - Cloud management services - Help desk support
| IBM (IBM) - Accenture (ACN) - DXC Technology (DXC) |
Value-Added Reseller (VAR) | Reselling hardware and software with additional services | Integration and customization services - Training and implementation support - Ongoing maintenance and support | Insight Enterprises (NSIT) - SHI International Corp. |
Freemium | Offering a basic version for free with premium features for a fee | Freemium software applications - Mobile apps with in-app purchases - Subscription upgrades
| Spotify (SPOT) - Evernote (EVER) - LinkedIn (MSFT) |
Advertising-Based | Generating revenue through advertising displayed to users | Free online content (news, videos, social media) - Targeted advertising based on user data - Freemium model with ad-supported basic tier | Meta Platforms (META) - Alphabet (GOOG) (YouTube) - The New York Times Company (NYT) |
Some might see Apple TV as a failure, within the “video streaming service” category. But as with Amazon Prime Video, success in that category is not really the point. Support for the core business model is the point.
Apple has had appliances that failed commercially, the point being that product failures can occur for products or applications. So can successes that support the core business model, such as the App Store supporting iPhone sales.
Device Name | Year Released | Reasons for Failure |
Apple III | 1980 | High price point - Buggy operating system - Hardware problems |
Apple Lisa | 1983 | Extremely high price point - Limited software library for a business-oriented machine |
Macintosh Portable | 1989 | Bulky and heavy design - Short battery life - High price tag |
Newton MessagePad | 1993 | Inaccurate and frustrating handwriting recognition - High price for limited functionality |
Power Macintosh G4 Cube | 2000 | Unique but impractical rounded cube design - Limited upgradeability - High cost |
eMac | 2002 | Confusing branding (targeted towards education but lacked features for mainstream users) - Limited software compatibility |
iPod Hi-Fi | 2006 | Niche market - High price compared to portable MP3 players with speaker docks |
AirPower | (Canceled in 2019) | Technical challenges in creating a wireless charging mat for multiple devices simultaneously |
HomePod (Original) | 2018 | High price compared to competitors - Limited features for the price - Siri voice assistant not as advanced as competitors |
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