The iPhone and Apple’s services strategy

The back glass on iPhone 11 is precision milled from a single sheet of glass — the toughest glass ever in a smartphone.
Apple’s new A13-Bionic-powered iPhone 11 starts at $699

Ben Thompson thinks (and we agree with him) that biggest news from yesterday’s event was that Apple cut prices.

Ben Thompson for Stratechery:

It was easy to miss, given that the iPhone 11 Pro, the successor to the iPhone X and then Xs, hasn’t changed in price: it still starts at $999 ($1,099 for the larger model), and tops out at $1,449); if you want the best you are going to pay for it… [But], the price cuts, which happened further down the line — were so important…

The success of the iPhone XR strongly suggests that there is more elasticity in the iPhone market than ever before. Apple also cut prices in China earlier this year with great success… the final step in Apple truly becoming a Services company, not just in its financial results but also in its strategic thinking [is[ ore phones sold, no matter their price point, means more Services revenue in the long run (and Wearables revenue too).

It does feel like there is one more shoe yet to drop when it comes to Apple’s strategic shift. The fact that Apple is bundling a for-pay service (Apple TV+) with a product purchase is interesting, but what if Apple started included products with paid subscriptions?

MacDailyNews Take: We bet if Apple offered iPhones along with services bundled into one monthly fee – offer tick boxes for Apple TV+, Apple News+, Apple Arcade, Apple Music, iCloud Storage, etc. – they’d have a winning sales strategy (Apple Prime) on their hands!

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

As soon as Apple launches their original content video service, an “Apple Prime” will make even more sense. — MacDailyNews, August 29, 2018

Apple could make a more compelling “Prime” bundle than even Amazon can offer because their original content sounds like it will be better and Apple Music + Apple News/Texture are unmatched. If they rolled some iCloud storage deal into it, it’d be tough to resist for many, many people!MacDailyNews, February 14, 2019

Hopefully, some sort of bundle option will also be available for us all to be able to the combine Apple services we want for a single fee, lower than the cost of subscribing to them à la carte. — MacDailyNews, March 25, 2019

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