In an attempt to lower its reliance on the iPhone, Apple is overhauling its leadership ranks and changing its priorities so that it is focused more on services, artificial intelligence, hardware and retail, reported The Wall Street Journal.
According to the paper, the changes have been afoot since 2018, and include bringing on new high-profile hires, promoting others and letting go of some. Apple has also moved to put projects on hold to give the new managers a chance to refocus priorities, noted people familiar with the matter.
While the main reasons for the overhaul vary from one unit to the next, the overreaching aim is to shift Apple from an iPhone-driven company to one in which its growth comes from the services and technologies that could be transformative in the future.
“This is a sign the company is trying to get the formula right for the next decade,” said Gene Munster, a longtime Apple analyst and managing partner at venture capital firm Loup Ventures. “Technology is evolving, and they need to continue to tweak their structure to be sure they’re on the right curve.”
Apple’s moves come at a time when demand for its iPhones is starting to slow. The pain is particularly pronounced in China, where the price tag of its latest iPhones and local competition have been weighing on demand. But diversifying beyond the iPhone may not be easy. As Apple eyes the media market, it already has formidable competitors, including Netflix and Spotify, which have more subscribers and the early mover advantage. Meanwhile, Google’s self-driving vehicles have driven more miles on the road than Apple’s efforts, while Amazon’s Echo speaker and voice-activated assistant Alexa are doing much better than the Apple Home Pod with Siri built in.
The paper noted that while Apple is still focused on augmented reality, self-driving vehicles and the health market, it hasn’t rolled out any major products or initiatives in those areas. While the iPhone accounts for two-thirds of the company’s sales, Apple has been urging investors to pay more attention to its Services business, which includes streaming music, the App Store and mobile payments. Services are expected to surpass $50 billion by Apple’s fiscal year 2020 and to account for more than 60 percent of total revenue growth at the company over the course of the next five years, said The Journal, citing data from Morgan Stanley.