Apple said to be missing out on billions of dollars in subscription fees for pro apps

“Apple still makes the bulk of its money selling iPhones. But… the company has built a services unit that’s now approaching $40 billion in annual revenue,” Jordan Novet reports for CNBC. “But it’s leaving money on the table by failing to embrace the biggest trend in the software industry: subscriptions.”

“Apple has a suite of products called Pro Apps, used primarily by audio and visual professionals, that customers buy and download onto their local hard drives — the way software worked in the pre-cloud days. Users of Mac computers go to the App Store to purchase Final Cut Pro, Logic Pro X, Motion, Compressor and MainStage 3. They each have separate prices — Final Cut Pro X costs $300 — and the whole package costs $630,” Novet reports. “Those are all products that Apple could conceivably host in the cloud and charge monthly subscriptions to use (Apple Music, for example, costs $10 a month for unlimited streaming). The model, known in the technology world as software as a service, provides less revenue up front but potentially much more over time if customers see the value and renew annually. Last year Apple said Final Cut Pro X had 2 million users, but none are paying for the video production software on a recurring basis.”

“Gene Munster, who spent 12 years covering Apple as an analyst before starting investment firm Loup Ventures in 2016, estimates that only 30 percent of Apple’s services revenue comes from subscriptions, suggesting that the company is potentially leaving billions of dollars of future sales on the table,” Novet reports. “‘I don’t know why it hasn’t happened yet,’ Munster told CNBC. He said that converting pro apps to subscription services would be ‘very logical.'”

Read more in the full article here.

MacDailyNews Take: Perhaps Apple knows something about their pro Mac users and they feel that subscriptionware wouldn’t fly at the current time?

Of course, knowing something about your pro Mac users would also mean that you’d know they expect annual Mac Pro updates, so what Apple knows (or cares about) their pro Mac users is eminently debatable.

27 Comments

  1. I hate the subscription model – I want to buy my software and have a fair upgrade price.. I think they have the correct approach but they should charge for upgrades.

    1. You don’t think $0 is a fair upgrade price? I’m not even talking about “ten finger discount” $0, a straight out “Hey, you want captions don’t you? Well, sorry, you’re getting captions. For free, hope you don’t mind. Oh, and I slipped up and put in HDR video, too. Sorry about that. I thought it was cool and couldn’t control myself” $0.

      These are the same people that say Southwest is MISSING OUT on not charging baggage fees because everyone is doing it.

      I’ve never heard a more insane argument than the fact that Final Cut Pro cost $999 when it was released, had free upgrades for years, then FCPX is released for $299 and PRO’S WANTED A DISCOUNTED UPGRADE PRICE!! They just couldn’t stomach the fact that they had to pay the same exorbitant (not at all) price that everyone else had to pay.

  2. I thought this article was going to say that by not keeping the pro Macs up to date and usable, pro app subscriptions were moving to Windoze instead. That’s likely another very valid way Apple is missing out. Update the pro machines, Apple!

    1. 100% this. Analysts and greedy-ass traders can fuck right the hell off… or better yet, GET f*cked in the head… for even suggesting Apple move to service-ize their products.

      Subscriptions on major/pro apps are a scourge of society. Like games that require internet, even for single player. They die as soon as the parent company decides to retire the authentication servers.

        1. Awwww, poor little Nicky’s sensibilities are offended. TFB Nicky.

          You call him human garbage because he said “fuck” and “greedy-ass”? That’s just abut the height of hypocrisy. They are just words Nicky. Do words scare you? Have you been indoctrinated in some youth camp or Sunday school that words that express a feeling or something that makes you uncomfortable are “bad words” and no one should say them even if they accurately express the situation, feeling or opinion of the person saying them?

          Grow up little guy.

            1. Nick, please refrain from insulting people with different religious beliefs than you. It makes you sound like a real piece of inhuman garbage.

        2. I’ll grant you it was a bit much.

          But, coming from someone who retweets Trump and wrote a blog post praising an “Alt-Hero” rising up against SJWs, is offended my limited use of a free-speech-protected swear word and suggesting clearly over-the-top, non-politically correct things be done to a privileged class of people, who then goes on to suggest I’m inhuman garbage?

          You don’t have a leg to stand on.

          1. Thanks for checking out my blog, Donald Trump is the “Alt-Hero” antidote to the mentally deranged, thought policing left. Your free speech is obscene as far as I’m concerned, and I’m free to criticize it as much as you are free to spew filth.

  3. People are getting tired of subscriptions. I don’t do subscriptions for software, it’s idiotic.

    I don’t want to pay a company FOREVER for a piece of software. I have software I might use once or twice a year. I’m certainly not going to pay every month for it. Especially at an apple premium.

    1. You call it “mining the consumer’s pocket”. I call it “ransomware”.

      It’s like ransoming your data, or it’s a “protection racket”.

      Once you move to the subscription version of the software and the vendor changes the file format (which inevitably DOES happen) from what it was under the non subscription version of the software, you’re stuck. If you want to access any of the files that have been updated or created under the subscription version of the application you MUST keep paying the subscription or you lose access to your own files. The vendor is holding your own files for ransom every month.

      It is not unlike the “protection rackets” of old. Gee mister, that’s a nice store [file] you’ve got there. It would be a shame if something happened to it like a fire “accidentally” starting [like you losing access to them]. Just pay us a small fee each and every month and we’ll make sure you get to keep your nice store [keep being able to access your files]. Is that really too much to ask for such a great service to you?

  4. if a piece of software goes subscription, i stop using it. imagine logic pro x as a subscription app.. that small community huddled around it would dump it for something better like Studio One. (which is much better)

    final cut? move to the Free Davinci Resolve, which does all the same things + more.

  5. So they can be greed mongers like adobe? Software as a service is a simply ploy for more cash, it does nothing for the consumer except relieve them of more money

    I have a 2010 macpro loaded up with Adobe cs6 and it’s fantastic for it although I am presently exploring other options for image editing and other usages to replace adobe for good. If they go back to properly selling me the suite then maybe I would stay with them but I’m not renting software. We buy homes to avoid rent and have ownership, same with cars, unless your a lease person I guess but for me and many others it’s a step backwards and an obvious cash grab

  6. Fuck Jordan Novet! Apple makes plenty of profits already and doesn’t need to fleece its loyal customers out more of the hard-earned cash. Yeah, I have a significant stake in AAPL, but there’s no sense in being greedy.

  7. Thinking “converting pro apps to subscription services would be ‘very logical.’” is a thought only the hopelessly greedy could love.

    Apple is not doing pros any favors these days and a subscription model would most likely be a death knell. Subscriptions certainly don’t work well for anyone not using these apps all the time to make money. It costs $75 (or more) a month just to be able to use Adobe apps on a month by month basis. They still have not come up with an editors special with a lower monthly rate. It’s pretty much one app or all apps whether you need them or not but in their pricing structure they’re missing that middle tier.

    I once asked Adobe about this and they said they were perfectly happy with the pricing structure they had. I’ll bet they are. But it doesn’t serve their customers well and is just plain greed.

  8. If developers offered annual upgrades instead of subscriptions there would be just as much screeching about GREED!! Leftists think they deserve everything for free or for a low, one-time price. If I need a product that is offered through a subscription, I subscribe, if it’s stand-alone, I’ll buy that. It’s hilarious to hear old farts kvetching about paying a subscription when they’ve used various pieces of software for years or even a decade or more without paying anything for it. Subscriptions are good ways to make up for the freeloaders who only leech off of the support provided by paying customers.

    1. Complete BS.

      This has virtually nothing to do with “leftists” or wanting something for free. And, yes, I am one of those “old farts” complaining about subscription software. (I started in the computing world in the 60s.) Read my post above. It has absolutely nothing to do with wanting things for free. It has nothign to do with “freeloaders”.

      The vast majority of professional software users upgrade every time there is a increase in capabilities of the software that is useful to them. Often professionals will skip a point upgrade or even a full level upgrade if there is nothing new and useful to them, myself included. Conversely, when there are new and useful upgrades professionals upgrade quite rapidly. (Personally, I’ve occasionally upgraded the moment it was possible to do so, paying full price, when the new features warranted it.)

      If a software vendor improves the product enough to warrant an upgrade then professionals will buy the upgrade. None of us should have our files held ransom by a subscription service. None of us should be paying a monthly fee for maintenance releases for two or three or more years.

      1. Leftist/socialist mentality of what you “should” be entitled to is exactly it. No one owes you anything. I pay monthly subscriptions for companies and products and values I support, if I don’t want to do that, then I don’t do it.

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