Analyst: Apple should mix hardware and services into ‘Apple Prime’ subscription

“Contrary to popular belief, Apple Inc. isn’t a hardware company. Nor is it a software company,” Christopher Mims reports for The Wall Street Journal. “Apple is, fundamentally, an ecosystem company—one that, with the help of millions of developers world-wide, has created a vast web of software and services that run on its 1.3 billion active devices.”

“The trouble is, as Apple increasingly emphasizes device prices over volumes for revenue gains, it confronts a fundamental tension—between charging people more for hardware and, simultaneously, more for services to access through it,” Mims reports. “The former puts profit margins ahead of prevalence, while the latter emphasizes maximizing the number of gadgets in customers’ hands.”

“Services, and the millions of developers and thousands of companies behind them, are the reason the iPhone is so sticky, says Horace Dediu, an Apple analyst and fellow at the Clayton Christensen Institute for Disruptive Innovation,” Mims reports. “One way for Apple to resolve the hardware-versus-services tension would be to roll them into one giant subscription, Mr. Dediu says.”

“Imagine a service where you simply subscribe to a regularly updated iPhone, Apple Watch, AirPods or some subset of these devices,” Mims reports. “Throw health monitoring, an iCloud subscription, Apple Music, Apple’s original programming and more into a cable TV-like bundle, or a la carte, and Apple could go from being a hit-driven company to one that throws off predictable, consistent, subscription-based revenue. Think of it as Apple Prime.”

Read more in the full article here.

MacDailyNews Take: As we wrote last month:

What we really want to see is an “Apple Prime,” as described by Goldman Sachs analysts Simona Jankowski and Drew Borst is an October 2016 note to clients. This “Apple Prime” subscription would include the Apple Music service, access to the iTunes library of TV shows and movies (some for free), Apple’s forthcoming original content, and exclusive sports programming.

Further, we’d really like to see a way to pay for all of the Apple services we choose for one price. Give us a bunch of tick boxes and let us choose our combination of iCloud storage, Apple Music, iTunes Match, etc. and let us pay a single price for all of our choices.MacDailyNews, October 17, 2016

Netflix presumes Apple’s original content will either be bundled with Apple Music or with iOS – January 23, 2018

[Thanks to MacDailyNews Readers “Fred Mertz” and “Dan K.” for the heads up.]


        1. I am no fan of Trump, but that does not mean that I want to see anti-Trump posts on MDN, either. There was no justification at all for your comment – no post by botty or one of the other alt-right personalities and certainly no relevance to the topic of the article. As a result, you inserted the politics into this forum, so you are to blame if it escalates.

          Think before you post. Then think again.

          1. Just reflecting reality….

            And letting the left side know that maybe they bring this out in people! (Go back a year or so and u wont see a single politisized comment by me..)
            But unfortunately left’s behavior disgusted to a point where i had to start saying something….
            Also.. believe it or not im not a partisan person and have never been.. but the left/libs have forced me into the position im taking.. so in a way u should blame the lefts.

            Next time there is a topic with the slightest hint of politics.. count the number of posts.. vs topics that are politics free..
            The ration is about 30 to 1..

            So dont blame me … the left will not hesitate for one second to politisize the smallest things… when they cools down.. most will be cool !
            My comment was to bring awareness to that fact … through a response to ‘what’s most popular….’ posted by ‘Reality ‘ above.


    1. these days for all kinds of goods and services. Fortune 500 companies lease buildings, cars, computer equipment, furniture, all kinds of things. As long as your car, chair, desk, laptop, phone, etc get the job done does it matter who technically owns it? You do essentially own the things you lease. You can do what you like with them. You just have to work within some rules which are not all that strict. I’ve never worried about leasing a car. I consider it my car even though it isn’t.

        1. Why does it matter? If I finance my car I own it and I’m a bit more free with what I can do with it. If I lease it I have to take much better care of it and follow more rules, mileage limit, maintance, etc. But in a practical sense it makes no difference to me. I can lease almost anything. Why would a product being made by Apple suddenly change the basics of leasing? I haven’t looked into it but there are probably leasing companies that let big corps lease Apple stuff already.

        2. already does this with business financing, which is a lease. Monthly payment and refresh your equipment every two years. I wonder how long Apple has been doing this. Maybe for years already.

            1. all those businesses leasing Apple equipment that they can’t do what they want with it. Oh wait, they are doing what they want with it. Lots of companies that you lease things from could put onerous restrictions on their products but they don’t because then they wouldn’t have any customers. Apple could do a lot of terrible things and so could a lot of other companies. They never will because it would mean losing customers and losing money. You are way too paranoid about this. As the other commenter pointed out, I own the data so it doesn’t matter who technically owns the hardware or software. That other commenter also astutely pointed out that you, applecynic, are already licensing software. You’re using things you don’t own. Better take it all back asap.

            2. I own my copy of software. I cannot modify it or sell it, but I own the unaltered file itself.

              Companie do put onerous restrictions. Where’ve you been? They can because they, not you own it. Do you think you could just ship your leased vehicle to Europe for the term of the lease? How about mileage restrictions? Wear and tear charges? I refuse to believe you at that naïve, rather in cynical fashion, I consider you a sycophant.

        3. I believe that you will find that you are effectively licensing iOS when you purchase an iPhone or iPad. You do not own the operating system, therefore you do not truly own your iPhone or iPad.

          Software developers/companies have been using the licensing approach for decades to get around certain aspects of consumer laws. I believe that you will find that you do not “own” any of your software – you simply purchased the right to use it (with many limitations attached).

          But that is semantics. There is a difference between owning and renting. And, in some cases, it might affect how you use or customize a device. But I am really not too concerned when it comes to “renting” an iPhone or iPad, if it comes to that. The important factor is the user data. As long as I control that data and can migrate it to other devices when I desire, then the actual ownership of the host device makes no material difference to me.

          1. “therefore you do not truly own your iPhone or iPad.”

            You hear that folks!? Finally an admission of the obvious. Then why don’t they tell me that?

            BTW, the EULA is a unilateral, un-negotiated agreement, without legal counsel, not fully applicable in court. Still there are Fair Use doctrines as well as the legality of actually jailbreaking (despite Apple’s legal objections), so there is precedence of ownership of the individual copy.

            1. By your definition of ownership we Apple customers don’t own our devices. Fine. Makes no difference to me. I’m still doing everything I want and enjoying my Apple experience. You’re wrong of course, hilariously wrong, but why would how you define ownership matter to me? You should buy yourself a cupcake and put a candle in it to celebrate your ‘victory’. Finally, “an admission of the obvious”. What a loser.

    1. Subscription models are bullshit. Yes every company wants to go to one because they can make an off a lot of money but for the average person you can literally bankrupt you. Take Amazon prime is an example roughly $10 a month Netflix with 4K $13 a month actually $14 a month there’s already $24 for just two subscription services. Next throw an apple and their hypothetical subscription model at $10 a month now you’re at $34 a month. Then for those who need office throwing just the one license at what 6.99 a month. We’re now at quite close to $50 a month for just a few of services. It’s a ridiculous model that only benefits corporate America. Pathetic

    2. When we were discussing this about a year ago or so… my number was120/ month for iPhone, icloud storage, music and Apple watch .
      But was also suggesting that there has to be a few tiers at different subscription levels which will includ differnt products and services.

  1. Just one more person that thinks Apple’s future is away from “Pro” (as narrowly defined by some older folks pining for the glory years) and towards consumer devices plus services.

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