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Apple Inc. unveiled a series of subscription packages, a long-awaited move that Wall Street hopes will spur further growth in service revenue.
At an online event on Tuesday, the company said it will launch Apple One subscriptions that combine multiple services, including Apple Music, Apple TV +, and iCloud storage, at a price lower than what users would pay if they purchased each service individually. .
Packages start at $ 14.95 a month for a tier that includes Apple Music, Apple Arcade, Apple TV +, and 50GB of iCloud storage. That lower tier will also have a $ 19.95 version for families. A Premier tier costs $ 29.95, adding Apple News +, Apple Fitness +, and 2TB of iCloud storage.
The offers are aimed at families, which means that they will work with Apple’s Family Sharing system that provides access to up to six people for each service.
The Apple One Individual plan offers savings of more than $ 6 a month, while the family plan saves more than $ 8 a month, the company it said in a statement. The Premier plan saves more than $ 25 a month, based on the standard monthly price, Apple added.
The announcement was part of Apple’s annual Fall Product Blitz. This year included new Apple Watches and a Updated iPad Air. Later this year, the company is expected to introduce several new 5G iPhones.
“While the focus for Street remains the iPhone 12 5G supercycle that will begin in early October, the launch of the next-generation Apple Watch, iPad Air, and service package are key ingredients in Cupertino’s recipe for the success of Heading into fiscal year 21 and beyond, Dan Ives, an analyst at Wedbush Securities, wrote in a note to investors.
“For the service package, we see it as a smart strategic move to further monetize its gold installed base,” he added, while estimating that this could raise service revenue by 5% to 7% annually.
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Apple has built a huge advantage in the global smartwatch market
Source: Strategy Analytics
The package initiative is an important bet by Apple to achieve the same loyalty that Amazon.com Inc. has earned with its Prime program, which combines free shipping with streaming video and many other services for an annual or monthly fee. This package is the foundation of Amazon’s success, and other companies have followed suit before with mixed results.
Apple doesn’t have a large e-commerce distribution and warehousing network like Amazon’s, yet it does have hundreds of millions of avid hardware customers who have already adopted some of its digital subscriptions. Unlike Prime, Apple offers several variations at different prices. Bundle deals will also include access to the Apple Arcade gaming service and Apple News +.
Spotify Technology SA, which offers a streaming service that competes with Apple Music, said the tech giant was “unfairly favoring its own services.” That echoed complaints Spotify has filed with European antitrust regulators.
Apple Music integrates seamlessly with the Apple Watch and offers some features that are not available when using Spotify with the device. The new packages can give Apple Music another advantage.
“We call on the competition authorities to act urgently to restrict Apple’s anti-competitive behavior, which if left unchecked, will cause irreparable harm to the developer community and threaten our collective freedoms to listen, learn, create and connect.” wrote a spokesperson for Spotify. in a sentence.
Apple also announced a new online training service called Apple Fitness +, which offers users video classes for workouts. This will integrate with the Fitness app on the iPhone and Apple TV, and requires an Apple Watch. The service will compete with offers from Peloton Interactive Inc., which sells subscriptions to its fitness service that run on apps and on its workout equipment.
For years, analysts and investors have asked Apple to emulate Amazon’s Prime approach. Some of Apple’s newer services, including News + and TV +, have started slowly. By combining them at a discount with more popular services, usage and subscriptions could increase.
Apple’s services segment is one of the fastest growing areas of the company and has grown into a $ 50 billion a year business. While services like advertising and AppleCare fell in recent quarters due to the impact of Covid-19, digital offerings such as the App Store, iCloud, and video products set records.
(Updates with Spotify’s comment in paragraph 11.)
