For years, the big tech has realized the best way to make money is when people use their services, not when they buy their devices. Microsoft, Google, Amazon went all-in on this strategy.
This business model means customer data is monetizable, which means the more personal information they collect, the more valuable their service becomes to their real clients - the advertisers.
Some took this strategy to its extreme and sold their devices at break even. The idea is to make money when people use the devices, not when they buy the devices.
Companies can still charge premium prices for hardware and software, but eventually they will turn on the data pumps and begin cashing on. Licences for Microsoft Windows have always been sold for hundreds of dollars. But with each new iteration of the operating system, Microsoft turned up the data collection and introduced more ads into the desktop.
It doesn’t matter if the company primarily sells hardware or software, their privacy policies will keep getting longer and broader to reflect their increasing appetite for your personal information.
Apple’s primary source of revenue has been selling hardware. But that market is dwindling as smartphone sales are on the decline.
But luckily for Apple, the corporation has a services division. And every year, its significance at the company is growing.
There is a gradual but visible trend of the declining strength of hardware and accessories and the growing share of revenue from Apple’s services.
The services include subscription models but they also include a newly emerging and strategically inevitable advertising division.
In 2022, Apple generated 4.7 billion U.S. dollars with its global advertising business. But they are seeking to triple that number into double digits as soon as possible. And by 2025, Apple is projected to generate $20bn annually from ads on their network.
Apple has its own advertising network called Apple Search Ads. Not many people are aware of this but investors and developers are paying close attention. Because Apple Search Ads is on the path to dominance.
Google owns by far the largest search engine and the largest video platform, and both giants are mainly powered by ads. Because of that, they make a lot of revenue from ads, and some people think that this is proof that Apple is better for your privacy than Google.
As I said in my first post, both are bad options, pick the one you prefer more in terms of UI, UX, hardware, price, etc.