I'm not used to Apple giving things away for free. The company ran iTunes at break-even or just above for years, banking that inexpensive content would help sell high-margin iPods and rumor has it Apple has eaten some of Hollywood's greed on movie pricing over the years to keep costs consistent, but giving away stuff for free?
Netflix and most other streaming services charge a subscription fee. Amazon bundles its video service into its overarching Prime service. That's what I expected Apple to do as well: fold Apple Video into Apple Music, add Apple Magazines (based on the Texture acquisition) and give customers a single point of entry into all of its content.
I discussed some of this with Chris Connolly on his terrific DailyTekk channel earlier this week:
But free with hardware purchase? That I didn't expect.
Part of Apple's recent game plan, as it gets effectively most of the customers it can, is to start getting more out of each customer. In other words, once everyone has an iPhone, if you want to keep growing, you have to start selling them stuff for their iPhones. Subscription services can be a great way to do that.
Free, while making the original device sale more valuable, doesn't add ongoing revenue on top of it, like subscriptions do. But, as the price of flagship devices continue to rise, maybe making those devices more valuable still ends up being an overall win?
Apple is preparing a bunch of new and exciting shows but still hasn't announced when or how they'll be made available. That could very well end up being the most interesting part of this story.
Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.
Free with device purchase? This is the company that wants to charge me monthly to have enough cloud storage for a proper backup of my $1000 phone, right? I think bundling it with my Apple Music subscription is a lot more likely. I'd love to be proven wrong though!
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