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Apple's Arcade service relies on an Apple device and is probably most appealing if you have several of them. Screenshot: Apple.com

Many of Apple's latest products and services share a common goal for the company: increasing customers' dependence on the iPhone. As Apple prepares to unveil its latest generation of iPhones on Tuesday, this "ecosystem" strategy is more pronounced than ever.

Why it matters: With the smartphone market stalling, Apple needs to find other ways to make money while also maintaining its share of the market. This approach serves both goals.

How it works: When iPhone customers buy a set of AirPods or sign up for the company's new credit card, they are not only adding lucrative revenue to the company's bottom line, they are also making it more likely that they'll stick with the iPhone for their next device.

A number of Apple's recent and forthcoming products play to this dynamic:

  • Apple Card: While there is a physical card, it is secondary. The main way you pay — and the way you manage your account and pay your bill — lives on the iPhone.
  • Bluetooth-based finder tags: Apple is rumored to be readying a device, similar to Tile, that can be attached to physical items and located using an Apple device.
  • Services: Apple has made a big push in this area. Some of the new services, like Apple TV+ and Apple Music, don't require Apple devices but certainly appeal more to Apple users. Others really do count on Apple hardware, like Arcade, which is for games that physically run on an iPad, iPhone or Mac.

History lesson: This ecosystem strategy dates back in some ways to when Apple introduced the iPod in 2001. At the time, iPod sales helped boost the Mac in what was dubbed the "halo effect," and it was 2 years before Apple introduced a Windows version of its iTunes software.

  • The iPhone has helped the Mac, too, but it has always worked with a PC, and these days many people never directly link their phone and computer at all.

Yes, but: In order for the ecosystem benefit to kick in, the latest device has to be compelling on its own. The HomePod is one area where Apple's Apple-first mentality appears to be limiting the company's sales, as its voice-driven home device competes with more full-featured rivals that use Google's Assistant or Amazon's Alexa.

What's next: Apple is set to unveil the next generation of iPhones at an event Tuesday. It will be worth watching what other devices and services accompany the new phones.

Go deeper

Prosecutors begin closing arguments in Chauvin trial

Steve Schleicher, an attorney for the prosecution in Derek Chauvin's trial, began closing arguments on Monday by describing in detail George Floyd's last moments — crying out for help and surrounded by strangers, as Chauvin pressed his knee into Floyd for nine minutes and 29 seconds.

Why it matters: The jury's verdict in Chauvin's murder trial, seen by advocates as one of the most crucial civil rights cases in decades, will reverberate across the country and have major implications in the fight for racial justice.

Kendall Baker, author of Sports
4 hours ago - Sports

European soccer is at war

Liverpool celebrating its 2019 Champions League victory. Photo: Nigel Roddis/Getty Images

Europe's biggest soccer clubs have established The Super League, a new midweek tournament that would compete with — and threaten the very existence of — the Champions League.

Why it matters: This new league, set to start in 2023, "would bring about the most significant restructuring of elite European soccer since the 1950s, and could herald the largest transfer of wealth to a small set of teams in modern sports history," writes NYT's Tariq Panja.

Dion Rabouin, author of Markets
4 hours ago - Economy & Business

2021's expected earnings blowout begins

JPMorgan CEO Jamie Dimon. Photo: Mark Kauzlarich/Bloomberg via Getty Images

First-quarter earnings so far have been very strong, outpacing even the rosy expectations from Wall Street and that's a trend that's expected to continue for all of 2021. S&P 500 companies are on pace for one of the best quarters of positive earnings surprises on record, according to FactSet.

Why it matters: The results show that not only has the earnings recession ended for U.S. companies, but firms are performing better than expected and the economy may be justifying all the hype.