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Apple’s New Bundle Takes a Page From the Amazon Playbook

Photo: Apple

Taking a page from the Amazon playbook, Apple is launching a Prime-like subscription plan that bundles several of its various subscription services together on one bill, marketing the new offering as Apple One. While individual platforms such as Apple TV+, Apple Music, and Apple Arcade will still be sold separately, the tech giant is hoping to boost its overall subscription business by giving customers a break on price if they commit to plans that combine multiple monthly services (and also throw in iCloud storage).

The new business model was announced Tuesday via a virtual Apple event, which also saw the introduction of new iPad and Apple Watch models, as well as a new Peloton-like streaming exercise service called Apple Fitness+. The latter offering is geared toward users of the Apple Watch and will feature “studio-style workouts” that can be streamed via Apple devices and tracked through the watch. It will be sold for $9.99 per month or $79.99 per year (with a three-month free trial with the purchase of a new Apple Watch).

As for the Apple One bundles, the company is initially offering three tiers of membership:

—The basic level gives one customer access to Apple Music, TV+ and Arcade, plus 50 GB of iCloud storage for a monthly fee of $14.95. Those services, if purchased individually, would cost about $21.

—A family plan, priced at $19.95 per month, offers the same three services but lets customers share access with five other family members and increases storage to 200 GB. Apple charges $2.99 per month for 200 GB of storage, resulting in roughly $8 of savings per month.

—Premier throws in Apple News+ and the newly announced Apple Fitness+, includes family access among six people, and upgrades storage to 2 TB, all for $29.95 monthly. Apple says this represents a savings of about $25 per month versus buying all these features separately.

In a press release announcing the new bundles, Eddy Cue, Apple’s senior vice-president of internet software and services, said Apple One would let customers “access the best of Apple entertainment across all [their] favorite devices with one simple subscription.” But more important, Apple hopes Apple One will get customers to sample services they might not have already bought into (particularly Apple TV+, which marks its first anniversary in November) while also making it less likely existing customers will cancel, given the cost savings now associated with Apple One versus à la carte subscriptions. Amazon, for years, has had a similar, if much simpler (and cheaper), strategy with Amazon Prime, which takes something at the heart of the company’s core business — free one- or two-day shipping — and throws in streaming music, TV, reading, and more. Similarly, Disney last year began offering a bundle of Disney+, Hulu, and ESPN+ at a reduced price.

Apple did not use Tuesday’s event to talk much about either its Apple TV streaming device or the Apple TV+ service. There have been rumors of a revamped Apple TV box on the horizon, though the company could wait until its next iPhone event (possibly happening next month) or even 2021 to unveil an upgrade to its streaming hardware line.

Apple’s New Bundle Takes a Page From the Amazon Playbook