- Apple is preparing to bundle services in discounted plans that will combine Apple Music, Apple TV+, Apple Arcade, Apple News+ and iCloud data storage, Bloomberg reported, citing people familiar with the matter. The bundles, which the company is calling "Apple One" internally, will be available as soon as October, when the company introduces its latest line of iPhones.
- The basic services package will include audio streaming service Apple Music and subscription video-on-demand (SVOD) platform Apple TV+. Subscribers will be able to add Apple Arcade, the gaming platform that charges a flat fee for more than 100 games, digital newsstand Apple News+ and additional iCloud storage in more expensive tiers, Bloomberg said.
- Apple is also working on a subscription for virtual fitness classes that people can watch on an iPhone, iPad or Apple TV. The move would position Apple to compete more directly with Peloton and Nike, per Bloomberg, letting the company offer streaming fitness classes or workout apps. In addition, Apple is planning to bundle software and hardware, such as giving buyers of its Apple TV a free year of Apple Arcade.
The reported bundling plans will likely help Apple to grow a services business that's become a key priority in making its hardware more distinct from Android devices, while also giving the iPhone maker a stronger wedge to round out its services to better compete with similarly far-reaching tech companies like Amazon. Apple's services revenue grew 15% to $13.2 billion in the most recently completed quarter from a year earlier, faster than the 10% growth in hardware sales that are its biggest source of revenue.
CEO Tim Cook in 2017 pledged to double the services business to $50 billion in four years, a target that's likely to be exceeded as the company bundles subscriptions and expands into new offerings like virtual fitness classes. Bundles could also increase consumer interest in services that have struggled to meaningfully take off, including Apple TV+, while serving as a launchpad for entirely new offerings, like the fitness programming reported in Bloomberg. The demand for virtual fitness and apps that track workout regimens has climbed sharply during the coronavirus pandemic, as many gyms remain closed and people seek out ways to stay in shape at home.
Apple this year also said Apple News has more than 125 million readers in the U.S., U.K., Australia and Canada, making it one of the most popular news aggregation apps in the world. However, its premium service Apple News+, which charges $10 a month for access to the digital versions of hundreds of magazines and newspapers, has struggled to gain more than the 200,000 subscribers it saw in the first 48 hours of launching in March 2019, CNBC reported. By bundling Apple News+ with services like Apple Music and Apple TV+, Apple may be able to extend the reach of its digital newsstand in English-speaking countries, giving advertisers who buy media in magazines and newspapers a bigger audience.
Apple's reported plans for bundled services would likely have a positive effect on advertisers overall, though it might be limited at first. The company doesn't sell advertising, except in the App Store and Apple News. While App Store advertising mostly consists of paid search and banners for apps, making it popular among software developers, Apple News boasts advertisers from a more diverse group of industries outside of the app space. Apple TV+ is an SVOD platform like Netflix and Disney+, limiting the opportunities for advertisers to participate as they can with ad-based video on demand (AVOD) services like Peacock, Pluto TV and Vudu that sell digital video inserts.