Apple Watch Fitness
Source: Apple Inc.
Apple on Tuesday announced its long-known Apple One bundle, a tiered system of subscription packages that give you access to a range of the company’s digital services like music, video, streaming fitness classes, and iCloud storage for a monthly price .
Apple’s offering, however, doesn’t par with Amazon Prime’s must-have, where you get a day or two of free shipping on orders, with a focus on sweeteners like access to streaming videos, streaming music, and discounts at Whole Foods . With the exception of Apple Music, there is no clear indication that Apple’s services have been compelling enough to attract a significant subscriber base. Apple’s latest list of services are late-in-the-world goods that have already been dominated by digital media rivals like Netflix, Hulu, Spotify, and several successful mobile game companies.
Even if the Apple One bundles save customers money instead of signing up for each service individually, the prime factor “Wow, I have to have this” from Amazon Prime is missing. While Amazon is starting its subscription with the attractive option for free shipping and adding bonuses on top of that, Apple starts with the bonuses first, holding back what would make Apple One a blockbuster.
So what’s missing?
“We found the announcement of Apple One services relatively unconvincing yesterday: Consumers cannot choose which services they prefer, savings from individual purchases are not mandatory compared to individual purchases in annual plans, and we believe it could be difficult to keep users out of competition hold music, video or game services, where they are often anchored, “wrote Needham analysts on Wednesday morning in a statement to investors. “We still believe that Apple should try to be more creative with its hardware [and] Services in integrated subscription bundles. “
The Apple One bundles lack the “creativity” required to truly drive demand for the product. With so many established companies already offering competing services for massive subscriber bases, it’s unlikely that many will choose to switch to the Apple bundle just because it offers a discount. Apple hasn’t used its hardware strengths to make Apple One more attractive than any of its competitors, despite the fact that it already has the weapon in its arsenal it needs to do the same with the iPhone, the most profitable and popular product it has manufactures.
Apple already has an iPhone upgrade program that lets you get a new iPhone every year as well as AppleCare service starting at around $ 35 per month. It’s an attractive and popular program that not only drives new iPhone sales, but also helps grow the company’s critical service revenue with AppleCare. Now imagine that you are merging the iPhone upgrade program with AppleOne and suddenly you have a compelling offer that, like Amazon Prime, is difficult to miss.
The caveat with the Apple One announcement is that for the first time since 2011, Apple didn’t announce a new iPhone model at its September event. It is entirely possible that Apple will include an iPhone offering in Apple One if it expects to announce the next iPhone 12 at another event in October. On the other hand, if Apple had planned to include the iPhone in Apple One, it would likely have saved Tuesday’s announcement for the next month.
Apple Services’ growth story remains impressive, with that company alone generating more than $ 13 billion in revenue in the third quarter of fiscal year. However, if this line item is to continue its rapid growth story without a breakthrough new hardware product category emerging immediately, it must view the iPhone as the linchpin to sustaining growth.