While Google focused on hardware, Apple took over the services market

Google is building all kinds of new hardware, but its subscription services are lacking

We’re looking forward to a lot of Google products coming out right now: the Pixel 6a, Pixel Watch, Pixel Buds Pro, and an unnamed Pixel tablet are all officially confirmed to be in the works, not to mention rumors like the foldable Pixel phone . Between existing and upcoming products, Google is moving toward the kind of hardware ecosystem for every corner of your life that rival Apple currently enjoys. But while Google may be closer than ever to actually competing with Apple on hardware, Apple has something else Google doesn’t have: services people want to pay for.

Consumer services are an increasingly important source of revenue for Apple. According financial results published in April, Apple made more money on services than on iPads and Mac computers combined last quarter. Services still represent only a fraction of the company’s overall turnover; iPhone sales alone accounted for more than half of Apple’s net sales during the same period. Still, the company’s services business is booming: Apple’s second-quarter services revenue grew 17% year-over-year from 2021 to 2022; product sales increased by 6.6%. Apple’s continued push into music, video and news is going pretty well, financially.

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Google, of course, provides some of the most popular online services on the planet with Search and Gmail among others. But while Google has had huge success in ad-supported products, it has always struggled to package services in a way that people are willing to spend money. Last summer, YouTube boasted that between its audio- and video-focused Premium tiers, it had 50 million paid subscribers. That’s a lot of people, but Apple Music, which launched the same year as YouTube Music, had 60 million paid subscribers in 2019 – and estimates put that number at around 78 million about a year ago.

Image: Apple – Apple won three Oscars with its original film
Coda.

Apple TV+ is estimated to have something like 25 million subscribers, a far cry from 87.6 million customers that Disney+ brags about, and that’s nothing to sneeze at. Apple TV+ is also the only place to see CODA, which won Best Picture at this year’s Oscars. Contrast that with Google’s last original video effort, YouTube Originals, which shut down in January.

Picture: YouTube-
Quartet,
a YouTube Original, has been renewed for four seasons.

While it’s true that Apple promotes its services quite aggressively on its hardware, I don’t think that’s the only reason the company is more successful than Google when it comes to convert hardware clients into service clients – YouTube Music comes pre-installed on many phones, just like Google Play Music before it. It’s that Google’s handling of many of its services seems terribly sloppy, and that can be a major stumbling block for many potential customers.

Take Stadia: Google’s cloud gaming platform launched in 2019 to generally favorable critical reception; I reviewed it myself and was blown away. But from its inception, the discourse on the service was largely dominated by fears that Google would neglect it or abandon it altogether. Two and a half years later, it’s pretty much come true. Major releases on the platform are rare, and now that Google has started licensing the technology that powers Stadia to third parties, the news of customer service shutting down wouldn’t come as a surprise at all.

It’s really not the skin of our noses if Google can’t understand subscription services; there’s no shortage of Android music or video apps to choose from, and I’m not sure if my Pixel experience would be much better with a super-smooth Google Music app than with Spotify. But if the company really wants to be competitive in the ecosystem business, it will have to do more than expand its hardware offering.