Apple Inc. is preparing a series of packages that will allow customers to sign up for some of the company’s digital services at a lower monthly price, according to people with knowledge of the endeavor.
The packages, called “Apple One”; inside Cupertino, the California-based tech giant, are scheduled to launch as early as October along with the other iPhone line, people said. The packages are designed to encourage customers to subscribe to more Apple services, which will generate more repeat revenue.
There will be different levels, according to people, who asked not to be identified by discussing private plans. A basic package will include Apple Music and Apple TV +, while a more expensive version will have both services and the Apple Arcade gaming service. The next level will add Apple News +, followed by a more valuable package with additional iCloud storage for files and photos.
Apple plans and package structure may vary. But the goal is to offer service groups at lower prices than would be charged if customers agree on each offer individually. An Apple spokesman declined to comment.
The initiative is a key offer from Apple to achieve the same loyalty that Amazon.com Inc. has won with its Prime program, which combines free shipping with video streaming and many other services for an annual or monthly fee. This package is the basis of Amazon’s success and has been imitated by other companies before with mixed results.
Apple does not have an e-commerce and warehouse delivery network like Amazon, yet it has hundreds of millions of avid hardware customers who have already embraced some of its digital subscriptions. The iPhone and iPad will suggest different packages to users, based on which Apple apps and services they already use. This feature will be coming later this year as part of iOS 14, the next software update for Apple devices.
The company is also developing a new subscription to virtual fitness classes that can be used through an app for iPhone, iPad and Apple TV, people said. This service will be offered in a top-level package with the rest of Apple services. Codenamed “Seymour”, the training package would rival the virtual classes offered by the company including Peloton Interactive Inc. and Nike Inc., according to people.
The new packages will be family-oriented, meaning they will work with Apple’s Family Sharing system, which allows up to six people to use each service. The offers are designed to save customers around $ 2 up to $ 5 per month, depending on the package chosen. For example, if a family subscribes today to all of Apple’s core services plus the highest level of iCloud storage, it would cost about $ 45 a month. A new package can knock more than $ 5 off that.
This approach is likely to be applauded by Wall Street, which wants businesses that generate reliable revenue streams. However, there is also the risk of confusing consumers with multiple subscription choices. This prevented the launch of the HBO Max broadcast service, which was introduced this year alongside existing HBO Go and HBO Now offerings.
The initiative is led by Peter Stern, a senior lieutenant of Eddy Cue, Apple’s longtime chief services officer. Bloomberg News reported last year that Apple was aiming for a package launch in 2020.
Initially, Apple has no plans to integrate packages with services such as AppleCare support or monthly payment plans for devices like the iPhone or Mac. Earlier this year, as part of the Apple Card, Apple launched offering interest-free monthly payments for some of its equipment.
In addition to utility packages, Apple is planning new software and hardware packages, including giving Apple TV first-year buyers a free Apple Arcade year. This would follow a year of free TV + offered to those buying new Apple devices.
Read more: Apple Cancels Arcade Games in Changing Strategy to Keep Subscribers
apples tested the waters with a subscription package last year, offering students free TV + access with a subscription to Apple Music, though it has never confirmed plans for a broad package for all of its major paid services.
company signaled the possibility though when it included a provision in agreements with publishers participating in News + who said the service could eventually merge with other services.
For years, analysts and investors have called for Apple to mimic the approach of Amazon Prime. Some of Apple’s newest services, including News + and TV +, have started slowly. By combining them with a discount on more popular services, usage and subscriptions can increase.
Read more: Apple’s new services off at a slow start in the first year
Apple’s services segment is one of the company’s fastest growing areas and has become a $ 50 billion a year business. While services like those for advertising and AppleCare have been declining in recent quarters due to the impact of Covid-19, digital offerings like the App Store, iCloud and video products set the record.