Why has Apple so overpriced iCloud?

“Something which hasn’t been mentioned in the weeks since Yahoo announced that it would give a terabyte of storage for free as part of its Flickr photosharing service is: Why has Apple overpriced iCloud so much?” Eric Jackson writes for Forbes.

“Here is an iCloud refresher: You get the first 5 GB of storage free; The next 10 GB (for 15 GB total) costs $20/year; 20 additional GB (for 25 GB total) costs $40/year; 50 additional GB (for 55 GB total) costs $100/year,” Jackson writes. “That might have been a great deal for storage a year ago when iCloud was first rolled out… Yahoo! is giving you 1 terabyte of storage for free. That’s 1,024 GB of free photo space.”

Advertisement: Limited time offer – 25% off Parallels Desktop 8 for Mac – Run windows on your Mac – Faster

Jackson writes, “If they’re selling iCloud to about 200 million users today at an average of $30 / year, Apple’s getting a $6 billion annual revenue stream. I’m sure Peter Oppenheimer is happy with that high-margin revenue more than covering the costs of their new data centers, but I worry that it’s coming at a hidden cost to Apple.”

Read more in the full article here.

65 Comments

        1. Gotta agree. While I wished that it were cheaper (which is what I tend to think about anything that costs me money;) it just works for me.

          I don’t think about it, it just does what I want it to.

        2. “Nothing is free”

          1 TB of space on Flickr (which is for photo and video only) is free, but it is ad-supported. Premium, which is ad-free, is $50/yr.

          That is a substantially cheaper than iCloud space.

          I think there is a middle ground. Flickr/Yahoo badly needs to keep and lure new customers into their ecosystem and can afford (need to take?) a “loss” on this direct transaction in order to gain profit from those members on other services. They are not in desperation mode, but they are being very aggressive.

          Apple has many other strong lures to their ecosystem and is still gaining new users. Though that rate is reduced, it is still going up. Their actual number of users is very high. They need to provide iCloud, but they are not luring customers with the price of iCloud.

          That said, I would rather $100/yr for 250-500 GB for iCloud.

          1. … Web Storage, it is 1TB of Photo/Video storage on the web. To understand the difference, try to store a … term paper? … on your Flickr account. LOTS of space available, right? Did it work? Apple’s limited, but more flexible, storage would be even MORE useful if you could (still) store modest web sites there, that was a service that was dropped – with the price.

          2. Check out the replies to the article on that site. The article was panned pretty badly.

            PS, I believe photos do not count toward your icloud limit.

            Just saying.

    1. It may not be overpriced for the service we get but it’s overpriced for the market. There are too many small rate steps, iTunes Match is extra, etc. They should do something like offer more free space to users with active iOS accounts, and the $100/year level should have at least 100GB with iTunes Match included.

      There’s a difference between iCloud and Yahoo, to be fair. iCloud users will actually use a lot of space while I’d guess a tiny fraction of the space Yahoo is offering will be used, therefore Apple has to maintain a much higher percentage of advertised space than does Yahoo (assuming you all know that companies that sell storage don’t have all that space, just the percentage they need to cover their customers’ usage).

      1. By the way… Why does Yahoo still exist? Seems to not be any need. Unless it’s similar to how Microsoft invested in Apple years ago. Maybe Yahoo is needed to keep Google out of anti-trust court.

        1. Microsoft was told to buy $150 million in non-voting Apple stock, and hang onto it for five years, with a lawsuit gun to their head after stealing and refusing to return stolen Apple QuickTime code. Get your story right. It was great PR for Apple and easy money for Microsoft. Apple didn’t need the cash, despite FUD to the contrary.

  1. This is a stupid article. That’s like comparing spotify $9.99 service vs $3.99 pandora premium service. Pandora you have to listen to commercials. Maybe I’m wrong because I don’t use the service but don’t you have to see ads in flicker.

    1. You don’t get ads in the premium service of Pandora. Additionally, you can time-shift using the Pandora Jam app (essentially recording songs for offline playback).

      You also don’t get ads with the premium version of Flickr.

  2. It is pretty clear to me that Yahoo is monitizing your photos by data mining them. You have no privacy, I believe. I am not in the know, but I expect Apple’s iCloud is not doing this, they do not data mine your photos to get pictures of your face and your families faces, and your friends. They do not tie these picture with other data mining sources to get all the info on you that they can. Apple has the ability to do this, but I don’t think they do it. In my opinion this is why we pay for GB from iCloud and get a TB for free from Yahoo. In other words you are paying for Yahoo’s storage with your personal data and pictures.

    1. Data mining what personal info? If its photo-only storage, which others have confirmed to be the case, then there’s no personal data to be mined, is there?

  3. Storage should be priced by the salary of the NSA analyst who can read your stuff. You should get a price break if a $100K/year high school dropout can read it, pay more to restrict it to a $200K/year dropout.

    1. Rather an offensive way to open your post is it not?

      Besides, I don’t believe your are totally correct. I doubt there is enough add revenue available for Yahoo to support giving everyone a terabyte of storage. I think the only obvious answer is the data mining. Data mining has become big business. Companies pay big for information on you (the government may also be paying for data mining). Some of the recent info about how Facebook gets its revenue is to data mine your personal information that you so freely share with all the world, tie your name – with your face – with your bank account – with your spending habits – with your credit card info – etc. etc. I think Yahoo is just trying to take a page from facebook and lure people into giving up that personal info that they will turn around and sell or turn around and market – so there are some “ads” in the equation but it is only a portion of the whole equation.

    2. Using your premise, which I don’t disagree with, I wonder how iRadio will shake out? If it is ad supported will the users information be shared by Apple? As opposed to paying a subscription fee or having iTunes Match?

  4. With the NSA collecting anything it can get its hands on, using any cloud service for important documents seems rather foolish.

    They may be able to get info my computer and steal info, but not as easily as vacuuming it up in the cloud.

    Just sayin’.

      1. Of-course it will. Why else are they snooping the optical fivers with a PRISM (a picture of Pink Floyd’s Dark Side of the Moon cover is very helpful here)? Or twisting arms of every data accumulating tech company to provide back doors to their servers?

        1. Telcom routers. Not servers of the companies accused of complicity. By splitting the pipeline at the Telcom router the NSA is able to make a mirrored copy (Prism) of everything in and out of these companies. If you can do that, and they can, you don’t need to ask for the information. You only ask for the information because it’s obvious that this information will be used and that will be known in the future. Therefore you need to have a record of asking for SOME information. Lest they companies might suspect that they have someone eavesdropping on all their data. Oops! Okay, Plan B.

    1. http://support.apple.com/kb/HT4865?viewlocale=en_US&locale=en_US

      Documents, contacts, etc., are all encrypted using AES-128 as a minimum. According to the numbers provided by the Wikipedia article on AES 128 and my probably corrector calculator work, it’ll take 1.1M years to break a single AES 128 key (caveat: Wikipedia calls it 2^45 time which I took to mean 1 second).

      Read the Wikipedia article if you’re concerned about your documents being readable by the NSA when stored on iCloud (or transmitted there).

      http://en.wikipedia.org/wiki/Aes_128

    1. Ah, but Google is one of the kings of data mining. Do you want Apple to become a king data miner? I don’t. I like Apple more civil and hardware motivated.

      1. Not at all, but if Apple doesn’t keep up with the competition people will move to that other service for the extra storage space! Then we have less members on iCloud then we will have another Apple web services failure or Apple’s failure to keep it updated and going as they loose interest in it like other things over the past few years.

  5. Let’s just take this a bit at a time shall we!
    Flickers 1TB is not an Apples to Apples comparison. Apples iCloud is NOT a huge HD in the sky. Flickers service IS. If you want a dumb HD in the sky then go with Yahoo/Flicker.

    If however,you want an intelligent synchronized service that makes your life seamless device to device, you need iCloud.

    I use Apple’s photo stream to sync and store recent photos, at no extra cost.

    I can’t put GB’s email on Flickr’s so called free 1T. I can’t put GB’s of synced app data on Flickr’s “free” 1T. I can’t put 25,000 songs and a similar amount of movies from iTunes match on Flickr’r “free” 1T.

    There is no comparable system to iCloud. So don’t expect Apple to price incomparable systems the same. Ask yourself, would you expect a car to be priced the same as a peddle bike?

    Also remember, Apple does not allow your stored data to be shared with other users. I distinctly remember that Facebook was considering the stored photo’s to be public property at one time. Yahoo, the same? I just don’t know. How did all that shake out in the end. I doubt Facebook or Yahoo will want to clarify. Trust is a big issue. With Apple I know it will not be used for Apples’ commercial use.

    1. Good points Paul. And I don’t mind paying for good services. Especially if my personal information is not being shared. At least not that we know of. My only complaint is that Apple’s services do not work as well as they should. If you can make the best hardware and software then you should be able to do services nearly as well. It’s the short leg on a three legged stool. Hopefully they will improve in this area. Because that is where their future lies.

      1. The vision is there, perfection takes time. Such complexity is never right first time.

        No one else has Apples’ vision. Because they all know this vision requires HUGE resources such as Apple is building. All they can come up with is the “Big HD In The Sky” vision. This is easy to implement since all it needs is a big HD.

        1. Well, actually Paul we’re talking about business here. Business requires execution. And I’m talking about more then iCloud. And as a long time Apple family member (but no fanboy) I do know what I’m talking about. Apple has been mediocre at best with services over the last 10 years. Yes Paul, vision is very important but execution matters in the end. I never make excuses for companies. Why would I ever do that? Not for companies I like. Not for companies that I don’t like. They’re just companies. Not my best friend. There’s no reason for me to fall in love with them when real people exist. We can all sit around and use flowery rhetoric but in the end ya have to get up off your ass and get it done. I keep waiting for Apple to get it together with their services, because they have more than enough time by now, but it hasn’t happened yet. Hope springs eternal.

          1. No one is executing better here than Apple!

            Imagine driving at 200 mph from point A to point B in a straight line 2D world. Now imagine driving from point A to B, then to C, then to D in a 3D world on a highly curved track at 200 mph.

            The former is what everyone is “executing”, as you put it. Apple is trying to “execute” the latter. The analysts and media are trying to pass both feats off as equivalent.

          2. Well said, GM.

            You do not fall in love with companies, like me, only good people you know.

            Apple services and software like iWorks begs to be totally overhauled.

            Here’s hoping tthey make it so great it blows the competition out of the water..

            Make Aperture better than Photoshop. Make a vector based graphics program better than Illustrator. Make Pages and Numbers better than Microsoft Office and on and on and sell at much lower prices.

            The Apple success story began with hardware design and MacDraw in the 1980s.

            The focus now is eliminating stitched leather, wood bookshelves and green felt visual icons.

            Bigger fish to fry. Make everything the best it can be, excellence will come out ahead.

  6. Flickr is offering 1 TB free for photos, but Apple does not count photostream or shared photostreams as data. That means Apple gives you unlimited storage! According to my calculator, unlimited is much more than 1 TB.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.