Photographer: Damien Meyer / AFP via Getty Images
Photographer: Damien Meyer / AFP via Getty Images
Apple Inc. is ready with a series of bundles that allow customers to subscribe to various of the company’s digital services at a lower monthly price, according to people with knowledge of the effort.
The bundles, called “Apple One” in the Cupertino, California-based technology giant, are scheduled to launch in early October alongside the next iPhone line, people said. The bundles are designed to encourage customers to subscribe to more Apple services, which will generate more recurring revenue.
Photographer: Gabby Jones / Bloomberg
There will be different layers, according to the people, who asked not to identify to discuss private plans. A basic package will include Apple Music and Apple TV +, while a more expensive variation that will have two services and the Apple Arcade gaming service. The next tier will add Apple News +, followed by a more expensive bundle with extra iCloud storage for files and photos.
Apple’s plans, and the structure of the bundles, may change. But the goal is to offer groups services at lower prices than that would be paid if consumers subscribed to each offer individually. An Apple spokesman declined to comment.
The initiative is a big bid from Apple to achieve the same loyalty that Amazon.com Inc. has won with its Prime program, which combines free shipping with video streaming and many other services for an annual or monthly fee. This bundle is the basis of Amazon’s success and has previously been mixed by other companies with mixed results.
Apple does not have an e-commerce delivery and warehousing network like Amazon’s, however it does have hundreds of millions of earthy hardware customers who have already embraced some of their digital subscriptions. The iPhone and iPad will present different packages to users based on what Apple apps and services they are already using. This feature will come later this year as part of iOS 14, the next software update for Apple’s devices.
Photographer: Gabby Jones / Bloomberg
The company is also developing a new subscription to virtual fitness classes that can be used via an app for the iPhone, iPad and Apple TV, people said. That service will be offered in a higher end bundle with the rest of Apple’s services. Codename “Seymour,” the workout package would compete with virtual classes offered by companies included Peloton Interactive Inc. en Nike Inc., according to the people.
Peloton shares slipped in premarket trading on Thursday after the announcement, but gained about 1% to $ 65.02 after the market opened. Apple rose 1.5%.
The new bundles will be aimed at families, which means they will work with Apple’s Family Sharing system that gives access to as many as six people for each service. The offers are designed to save consumers around $ 2 up to $ 5 per month, depending on the package chosen. For example, if a family subscribes today to all of Apple’s key services plus the highest level of iCloud storage, that would cost about $ 45 a month. A new bundle could buy more than $ 5 of it.
This approach is likely to be applauded by Wall Street, which urges companies to stream reliable revenue. However, there is also a risk that customers will be distracted with multiple subscription choices. This hindered the launch of the streaming service HBO Max, which was introduced this year alongside existing offerings HBO Go and HBO Now.
The initiative is spearheaded by Peter Stern, a top lieutenant for Eddy Cue, Apple’s longtime services chef. Bloomberg News reported last year that Apple was focused on a launch of bonds in 2020.
Initially, Apple did not plan to integrate the bundles with services such as AppleCare support or monthly payment plans for hardware such as the iPhone or Mac. Earlier this year, as part of the Apple Card, Apple launched offering monthly payments without interest for several of their devices.
An Apple interactive television cabinet.
Photographer: Gabby Jones / Bloomberg
In addition to the bundles of services, Apple is planning new software and hardware bundles, including giving buyers of the Apple TV set-top box a free year of Apple Arcade. That would follow a free year of TV + offered to those who buy new Apple devices.
Read more: Apple cancels arcade games in strategy change to keep subscribers
Call hit the water last year with a subscription bundle, offering students free access to TV + with a subscription to Apple Music, though it has never confirmed plans for a wide range for all of its major paid services.
The company signaled the possibility, however, when it included a facility in deals with publishers that participated in News + that said the service could eventually be bundled with other services.
For years, analysts and investors have called on Apple to imitate Amazon’s Prime approach. Some of Apple’s newer services, including News + and TV +, have started slowly. By bundling them at a discount with more popular services, usage and subscriptions could increase.
Read more: Apple’s new services have slowly begun in the first year
Apple’s service segment is one of the company’s fastest growing areas and has become a $ 50 billion a year business. While services like those for ads and AppleCare have been down in recent quarters due to the impact of Covid-19, digital offerings such as the App Store, iCloud and video products set records.
(Updates shares in eighth paragraph.)
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