After years of chasing router standards and finally abandoning adopting new standards back in 2013, Apple is finally being decisive about its AirPort routers division. Over the past year the company has been reassigning members of the router engineering team to other divisions, including the one that makes Apple TV. The news has not been made official yet, apparently, but is being widely reported today.
A router is basically what converts a modem signal into a wireless one – WiFi – and helps connect devices to the internet. Apple currently makes three models – AirPort Express, AirPort Extreme, and AirPort Time capsule, the last of which is also a hard drive for Mac backups.
There’s not much money in it for Apple Inc., which made $11.132 billion from the entire segment over fiscal 2016 – that’s a mere 5% of their overall revenue, and routers were only a small part of that segment, with the other devices being Apple TV and Apple Watch.
But that might not be the reason the company is ditching its router-making division. Our take is that the company is trying to streamline its devices portfolio in preparation for putting more resources into their services segment. We’ve been covering that for almost a year now, and our most recent article on the subject coves several aspects of why Apple is slowly shifting focus to services over devices.
RELATED ARTICLE: How Apple Services (Like Apple Pay) Can Make Apple Not Just an iPhone Maker
Apple’s approach to making routers have been vastly divergent from the top players in the segment, like Netgear, Belkin, D-Link, Cisco and others. The main reason has been that AirPort routers focus more on integrating functionality with other Apple products and their own operating systems. Other companies typically focus on supporting the latest router technology and incorporating the latest chipsets and so on.
As such, Apple exiting this market could be a huge advantage for other router makers to swoop in and fill the gap. But there’s also a risk that Apple-router-supported devices will take a sales hit because of this. For example, Apple Music can be played through an AirPort router when linked to an iPhone or a Mac PC. If Apple is no longer making routers, consumers could well hop on to Amazon Prime or Spotify just for the music. That knock-on effect won’t hurt Apple that much, but the loss of loyalty will.
That’s possibly one of the reasons Apple continues to remain silent on the matter. No point in inviting bad PR at a time when their whole devices segment is under decline.
Thanks for reading our work! Please bookmark 1redDrop.com to keep tabs on the hottest, most happening tech and business news from around the world. On Apple News, please favorite the 1redDrop channel to get us in your news feed.
