Tech & Innovation

Is Apple the new Microsoft?

The iPhone is aging into infrastructure; Services is doing Office math, and Apple’s next act has to arrive before its “premium” cycle cools for good

ByShannon Carroll

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Published 6 hours ago|Updated 3 hours ago

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David Paul Morris/Bloomberg via Getty Images

Apple $AAPL -0.71% built its modern empire on a simple promise: The future would arrive neatly boxed, beautifully staged, and — crucially — worth the hassle. People updated because they wanted to. People upgraded because they couldn’t not. Apple would watch the world sprint to get the latest product or software like they were joining a cultural moment, even when the “moment” was mostly a slightly different lock screen or a new way for your phone to nag you about bedtime.

Now, that consumer sprint looks more like a shuffle — cautious, slightly annoyed, and faintly suspicious that “new” means “more intrusive” rather than “more exciting.” Apple’s old trick was making the future look fun. Its new trick is making the present feel expensive to leave. 

Heading into Thursday’s earnings, Apple looks increasingly like a company that wins by running a system — a mature platform that turns an installed base into recurring revenue, ships upgrades like maintenance, and measures success in retention as much as (if not more than) excitement. That model prints cash when the default holds. It gets uncomfortable when “default” becomes a fight. 

Analysts still expect Apple to post a record holiday quarter — consensus calling for revenue of about $138.4 billion (up about 11%) and EPS around $2.67 — but this hardware icon is trying to convince the market it deserves a software-and-services multiple while its most important product category matures and its platform gets dragged under regulators’ fluorescent lighting.

Apple has entered its Microsoft $MSFT 0.22% era. The iPhone is becoming Windows, the layer you rely on, tolerate, and maintain. Services is becoming Office, the high-margin suite riding on top of a captive base. And everyone is starting to wonder: OK, Apple, what’s next? Being boring is acceptable. Being irrelevant isn’t.

Microsoft’s ecosystem was developers and workplace dependency; Apple’s is consumer life integration — payments, devices, accessories, identity, the quiet convenience of everything working together. Apple made that integration feel creative and human, then spent years mocking Microsoft for being the uncreative incumbent. Now, Apple risks falling into that same trap: massive, everywhere, and slowly losing the ability to convince people it’s steering the future.

Apple’s stock has been acting like the market senses the shift, too. Yes, it’s a company with an almost-$4-trillion market cap. But earlier this month, its shares were on pace to match their longest losing streak since 1991. And now, the market is heading into Apple’s earnings with a familiar debate playing out in analyst notes: strong iPhone demand and resilient margins on one side, and a tougher setup ahead on the other — costs, comps, and the creeping feeling that the iPhone isn’t a product category that can still surprise anyone.

Microsoft lived through its dominant-platform chapter. Then it drifted; still massive, still profitable, still everywhere,........

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