Apple has launched its first subscription plan, Apple One, at its Time Flies event held on Tuesday.
Described by Apple as “the ultimate collection of Apple services”, the package includes Apple Music, Apple TV, Apple Arcade and iCloud storage, with the addition of Apple News+ and Fitness+ for Premier customers, which can also be shared with up to five people. Prices range from £14.95 to £29.95 a month, with a 30-day free trial available to new customers.
Individual and Family plans will be available in over 100 countries and regions with the Premier plan will be available in Australia, Canada, the UK and the US.
Alongside this, the company made a slew of other announcements, unveilling a revamped version of the iPad Air, a new eighth-generation iPad, Apple Watch Series 6, Apple Watch SE and iPad OS and iOS 14.
The tech giant also announced another subscription service: Fitness+. Due to launch later this year, Fitness+ gives users access to home workouts, which are integrated with “personal metrics” from your Apple Watch.
Apple One: A subscription to unite the ecosystem
This move towards an all-in-one bundle is in line with the steady rise of consumer subscription services, with those in the industry speculating that the Apple would branch out into this area for the past year.
The company has long been known for its ‘walled garden’ approach, in which software and hardware operates in a closed ecosystem that is only supported on Apple’s own devices. Offering users a bundle of services through an Apple One subscription may be key to keeping users within its ecosystem rather than augmenting their Apple products with other devices and services from third parties.
According to research by software company Zuora, 71% of adults across 12 countries use subscription services, with the average person spending $640 on digital subscriptions in 2019 according to the New York Times.
This has been boosted by the Covid-19 pandemic, with 43% of people surveyed considering a new subscription service during the outbreak, according to research by Warc.
This comes as the company has faced a decline in smartphone sales, with data from Gartner revealing iPhone shipments were down 0.4% year-on-year in the second quarter of the year.
A subscription model similar to that of Amazon Prime could therefore be a way of further ensuring customers stay loyal in the midst of the general slowdown of the global smartphone market, which experienced its largest year-on-year decline in Q1 of 2020 due to the Covid-19 pandemic.
With the Covid-19 pandemic and subsequent lockdown measures resulting in the closure of cinemas, theatres, gyms and other venues, a subscription bundle offering easy access to products such as Apple TV and Fitness+, while boosting user numbers for other products included in the bundle, may have come at the right time for the company.
In fact, ZDNet’s Jason Perlow has calculated that buying the services included in Apple One individually would cost between $25 and $40 per month, making the bundle “nearly a no-brainer for existing Apple customers”. What’s left now for the company is to entice non-Apple users, thus further expanding its customer base and competing with rival subscription packages.
However, the move has already attracted criticism, most notably from music streaming giant Spotify. Responding to the launch of Apple One, the company issued a statement decrying the subscription bundle, which could encourage many users to drop Spotify in favour of Apple Music, as anti-competitive.
“We call on 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,” Spotify said.
Spotify currently has 163 million subscribers worldwide compared with Apple Music’s 60 million.
Getting users “hooked on is services”
Ben Wood, chief of research at CCS Insight believes the move may help the company increase levels of engagement with a range of its products.
“The bundled services offered by Apple One underline the company’s commitment to generating ongoing service revenue while encouraging greater engagement with Apple’s ecosystem of products. In some cases, Apple One will also encourage people to take an additional subscription beyond Apple Music to less-popular services such as Arcade and News+,” he said.
“Apple’s services strategy is the gift that keeps on giving. No other smartphone maker has managed to find a way to make money from their devices after the initial sale. Whether it’s a brand-new iPhone or one that has been sold second- or third-hand, there’s still an opportunity for Apple to bring in revenue and get users hooked on is services.”