Apple One subscription borrows from Amazon but fails

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Apple Watch FitnessSource: Apple Inc.

Apple on Tuesday announced its Apple One bundle, a tiered system of subscription packages that gives you access to a suite of the company’s digital services such as music, video, streaming fitness classes, and iCloud storage. for a monthly price.It’s a move that Apple watchers, investors, and geeks have wanted for ages, and it comes straight from Amazon’s Prime playbook: Lock down customers with an attractive subscription package and keep it. linked to your ecosystem forever, ensuring future sales.

But Apple’s offering doesn’t match the inescapable nature of Amazon Prime, which gives you free one- or two-day delivery on orders, with added sweeteners like access to streaming video, streaming music and discounts at Whole Foods. With the exception of Apple Music, there is no clear sign that Apple’s services have been convincing enough to attract a significant subscriber base. Apple’s new line of services is made up of commodities that arrived late in the world, already dominated by digital media competitors such as Disney-owned Netflix, Hulu, Spotify, and several successful mobile game companies.

Even though Apple One bundles will save customers money instead of signing up for each service individually, it still lacks the “wow, I gotta have this” factor that Amazon Prime has. While Amazon starts its subscription with the attractive free shipping option and adds bonuses on top of it, Apple starts with the bonuses and is holding back the one thing that would make Apple One a blockbuster.

So what is missing?

L’iphone.

“We found the Apple One service announcement yesterday relatively disappointing: Consumers can’t select the services they prefer, the savings on itemized purchases aren’t convincing compared to itemized purchases on annual plans, and we believe that it might be difficult to push users past the competition. music, video or games services, where they are often anchored, ”Needham analysts wrote in a note to investors Wednesday morning. “We continue to believe that Apple should look to bundle its hardware in a more creative way [and] services in integrated subscription packages. ”

Bingo.

Apple One bundles lack the “creativity” needed to truly meet the demand for the product. With so many incumbents already offering competing services to huge subscriber bases, you’re unlikely to see many choosing to upgrade to the Apple plan just because it offers a discount. Apple hasn’t harnessed its material strength to make Apple One more attractive than any of its competitors, even though it already has the weapon it needs in its arsenal to do so with the iPhone too, the most profitable and popular product it makes.

Apple already has an iPhone Upgrade Program, which gives you a new iPhone every year as well as AppleCare service starting at around $ 35 per month. It is an attractive and popular program that not only boosts sales of new iPhones, but also helps to increase the company’s significant service revenue with AppleCare. Now imagine merging the iPhone Upgrade Program with AppleOne, and suddenly you have a compelling offer that will be hard to pass up, just like Amazon Prime.

The caveat to Apple One’s announcement is that Apple hasn’t announced a new iPhone model for the first time at its September event since 2011. It’s entirely possible that Apple is integrating. an iPhone deal to Apple One when it announces the upcoming iPhone 12 at another event scheduled for October. On the other hand, if Apple had planned to include the iPhone in Apple One, it likely would have saved Tuesday’s announcement for next month.

Apple’s history of service growth is still impressive, and this company alone recorded more than $ 13 billion in revenue in its fiscal third quarter. But if this line item is to continue its rapid growth without a new, game-changing hardware product category on the immediate horizon, it will have to look to the iPhone as a backbone to keep the growth going.

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