After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul

by Tripp Mickle

Standing before everyone, he clicked to an image of an X-shaped chart that showed Apple’s hardware profit margins declining and its services profit margins rising. His message to the attendees was that Apple’s legacy business, the one most associated with Ive, had become a drag on its performance as the costs of adding more cameras and components to the iPhone had risen while the phone’s sales price remained flat. Meanwhile, services such as iCloud subscriptions were lifting the company’s bottom line because they had relatively fixed costs and more and more people were signing up to pay monthly fees for them. Stern’s job was to find a way to generate more of that easy money. The presentation alarmed some people in the audience. It depicted a future in which Ive—and the company’s business as a product maker—would matter less and Cook’s increasing emphasis on services—such as Apple Music and iCloud—would matter more.