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How much are digital services worth? πŸ’°πŸ“±

lewys-gp
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lewysgp_0-1644580391095.png

 

A TL;DR is at the bottom of this topic.

 

Last week, I read a brilliant topic from our very own man on the inside, @Chris_K, titled 'Have we crossed a line with smartphone addiction?'. (If you missed it, go give it a quick read).

 

It left me thinking about smartphones, the time I spend on them and other things. Stuff like the Metaverse and Web 3.0 have been dominating my news and social feeds recently as well. The improvements of our phones and technologies, in general, have us getting more hooked than ever before. 

 

Should we accept our fates of living in the digital world or not? I'm sure there will be so many benefits with these advancements, but I guess, it's about finding a balance.

 

So, that was on my mind this week, and then I came across some news about Apple πŸŽ:

 

"Despite one of the most challenging years in history, Apple had its most profitable quarter ever: $123.9bn in revenue, up 11% YoY, and $34.6bn in profits. Chip shortages cost the firm $6bn. Spending on Apple services now runs to about $100 per user per year. Services now make up around a sixth of revenues (and are twice as big as the Mac computer business).

 

Apple’s franchise has proved robust. There are approximately 1.8bn Apple devices out there. And Apple services ecosystem counts nearly 800m subscribers, up from less than 400m a couple of years ago, according to analyst Neil Cybart.

 

I’m quite impressed. Sure, the company flubbed home entertainment devices (the HomePod was a bust and don’t talk to me about the Apple TV remote) and its automotive ambitions are certainly playing out slowly. But the appeal of its end-user devices remains, together with demonstrably capability to deliver a services-based business. At around $19bn a quarter, Apple’s subscriber business is about 2-3 times bigger than Netflix.

 

It’s not unreasonable to believe that having mastered phones, watches, subscriptions, refurbishments and payments, they’re well-positioned for future platforms like the metaverse."

 

As you can see, I've emboldened the stuff that really stood out to me β€΄οΈ. I couldn't believe it when apparently each Apple user spends $100 per year on their services... that its subscriber business alone is 2-3 times bigger than Netflix!?

 

I've been reading a book by the same author I've quoted above. It's called The Exponential Age πŸ“–. So, I am aware of these businesses, how they operate and what the future may look like. But, I definitely don't spend $100 per year on Apple's services.

 

Another company in the news recently is Spotify πŸŽ΅. They spent big to get exclusive rights to The Joe Rogan Podcast last year, but this acquisition has caused them some PR troubles recently. I won't delve too deep into this controversy (a bit political and about COVID), but the backlash has caused them to lose some legendary artists on the platform and even lost a few billion of stock value (has gone back up today after introducing some new measures)!

 

I would like to ask the community a few questions and see if we can enjoy a nice discussion about these digital services:

 

  • How much do you spend on digital services?
  • How much would you be willing to spend on digital service(s)?
  • What is your favourite digital service?
  • What digital services do you have? Do you recommend any of them?
  • What digital services do you consider good value for money?
  • Any digital services you've cancelled? Why?
  • Do you have any of the O2 digital services? The Extras? Bolt-Ons? What's your favourite?

Some of my answers:

 

I must spend Β£30-50 per month on digital services (off the top of my head). This would include Spotify, streaming (e.g. Netflix) and other stuff like insurance and my Kindle. My favourite would likely be the Kindle, but I'm not a huge fan of just giving my money to Amazon. It is so convenient, though. Plus, the app on my phone is so brilliant, I can read easily any time I'm travelling without the actual Kindle device. Maybe, someone has an alternative to recommend for me?

 

I'm a serial canceller too. I'll always try free trials of paid products (yoga, fitness, etc.) but I'm very good at not committing to paying. I use stuff like Strava for running still, but that'll be the free version for example.

 

What is a digital service?

 

Well, for Apple, it could be any of the following: App Store (they take 30% from developers, I think), Apple Music, Apple Podcasts, Apple News, Apple TV, Apple Arcade, Apple Fitness, iCloud, Books, Health, Insurance and maybe more! If it's digital and a service, you can include it.

 

I hope you found this an interesting read! I'm looking forward to reading some of the community's comments πŸ’°πŸ“±.

 

TL;DR Apple users now spend $100 (avg.) on their services per year. So, I was thinking about how much I spend on digital services. I'm also curious about how much community members spend, what services they like, dislike and more. Read my questions and if you feel comfortable answering, please comment below πŸ˜Š.

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gmarkj
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Hi @lewys-gp. Interesting article, and while the numbers are very high I am not surprised - just look at the attention and clamour surrounding new Apple products. We see a lot of activity around them on the forum, and given the %age of activity we see here vs what happens across other channels (Facebook/Twitter/Instagram) you can only imagine what it must be like for the social teams.

 

From my point of view, we really only pay for Virgin (TV, internet and phone) and a Prime account. I occasionally use a Kindle offer (3 months free or for 99p) but that's it.

We don't have Sky, no Spotify (other music streaming is available) or Apple products (we have an iPad mini, but it's old and we don't pay for storage).

 

  • How much do you spend on digital services?
    • We have Virgin and Amazon Prime, so around Β£60 per month in total. Have just remembered the Ring doorbell, so make that Β£62!
  • How much would you be willing to spend on digital service(s)?
    • About what we do! We keep an eye on our Virgin bill and have a discount with them (thank you retentions) and always consider moving at the end of our contract.
  • What is your favourite digital service?
    • Hard to look past Virgin as we have the TV, internet and phone with them. Although Prime is extremely useful just for shopping, and the music/media streaming is very good!
  • What digital services do you have? Do you recommend any of them?
    • Virgin is normally good - have only had a couple of days with issues and given I have been working from home for almost 2 years now that's a big help! My only criticism is the constant price rices and having to call and threaten to leave to get a better deal. Why is it that new customers can get the same package as me for 1/3rd the price?!
    • Prime are good if you make use of them, but I do feel rather guilty now and then at the low level of money going back to the UK from them and local businesses missing out.
    • We have a paid for Ring doorbell account so we have the back-up storage. It's very useful and you can get some great images of your neighbours not expecting it!
    • We got a Tado thermostat as part of the o2 Smart Home trial which we kept and is pretty good. Not sure how much better the paid version is.
    • Finally we have a few IP security cameras to keep an eye on the front and back of the house.
  • What digital services do you consider good value for money?
    • Most of the accounts we have are free or bundled in with buying products, so those are pretty good value!
  • Any digital services you've cancelled? Why?
    • Have had a couple of Kindle deals that had to be cancelled once the low cost period ended.
  • Do you have any of the O2 digital services? The Extras? Bolt-Ons? What's your favourite?
    • I have a free Disney subscription, but that's it!

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lewys-gp
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Hey, @gmarkj! Thanks for commenting. 

 

I'm always tempted by that 99p Kindle offer, but have always resisted. I just purchase the books on an ad-hoc basis, but totally agree with you that I do feel bad limiting my money to one big corporation, and not spreading it across lots of other small businesses. My consciousness trying to defeat the convenience πŸ˜….

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