In an effort to increase revenue from subscription services, Apple Inc (Nasdaq: AAPL) is working to roll out a plethora of unique subscription plans that offer a combo of services in a single pack. According to Bloomberg, which first reported the news, the bouquet of multiple services has been named “Apple One” by the company’s executives, but the final name is yet to be announced by the company. Following the news, the stock rallied 1.77% or $8 to close at $460.04, reflecting a market cap of $1.967 trillion.
The Cupertino, California-based Apple offers a massive portfolio of ever-increasing services such as Apple Music, Apple News+, Apple TV+, iCloud storage, and Apple Arcade, among others. In an attempt to lure more clients, the tech giant is planning to roll out bundle deals that will enable subscribers to save money.
By October, the company intends to launch the aforementioned “Apple One” digital service packs along with iPhone 12 smartphones. The packs are anticipated to include multiple services for a single fee that costs less than subscribing to every single service individually.
The basic Apple One pack is anticipated to include Apple TV+ and Apple Music. Further to this, the packs will be multi-layered and include Apple Arcade, iCloud storage options, and Apple News+, with the monthly fee increasing in accordance with the number of services opted for. Specifically, the report states that Apple is working a pack that includes all services.
The bundles are anticipated to focus on pleasing households to enroll while allowing a maximum of six people to share access to the subscribed service package.
Subscription costs of the bundled packages have not been revealed so far, but monthly savings are expected to be minimal, ranging between $2 and $5. Currently, the subscription fee for Apple Music is $9.99, Apple Arcade is $4.99, Apple TV+ is $4.99, Apple News+ is $9.99, and the cheapest iCloud storage facility (50GB) is $0.99.
By clubbing two or more services as a single pack and offering at a discount, Apple hopes to boost its top line by way of new subscribers and prevailing subscribers signing up for additional services.
Furthermore, the report indicates that Apple may create a fitness service pack, which can be accessed through iPad, iPhone, or Apple TV. The in-house codename for the service is “Seymour” and is anticipated to be pitted against virtual physical fitness class services offered by Nike and Peloton. This implies Apple Watch would be pushed using the service.
The company’s service business is growing in leaps and bounds. During the fiscal third quarter, the division posted $13.16 billion in revenue, reflecting double-digit growth. Some of the services, for example, Apple News+, are not growing at the same rate as others. If the service is clubbed with another popular service, Apple Music, for example, people may be inclined to purchase the service.
Overall, it is similar to Amazon’s Prime service, which provides faster shipping to Amazon Prime subscribers, along with Video services, Prime Music, Photos, discounts at Whole Foods, etc. A bundled offer has greater chances of keeping customers locked into a service for a longer time, compared with a standalone pack.
The report on the new range of services planned by Apple is expected to keep the stock bullish in the short-term.
The historical price chart indicates that the stock of Apple is moving along the ascending trend line. The MACD indicator is making new highs. Therefore, we are anticipating the stock to appreciate further in the days ahead.
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