Apple One officially launched Friday (Oct. 30), offering customers discounts on bundles of up to six of the company’s subscription services — and Apple will now push the bundles to any new subscriber who signs up for its Apple Music, Apple TV Plus, Apple Arcade game or Apple News Plus packages.
The savings from the Apple One bundles range from $6 on the Individual plan to up to $25 per month on the top Premium plan. Customers in over 100 countries and regions can now sign up for Apple One.
Apple’s goal: to keep the flywheel spinning on its multiple subscription businesses, which are part of its fast-growing Services segment. For the quarter ended Sept. 26, Apple’s Services hit another record high of $14.55 billion, up 16% year over year.
“On the services side, we had customers coming to us and asking for an easier way to buy all of our services, and we wanted to provide that,” CEO Tim Cook said on Apple’s earnings call.
Research has shown that subscribers who take multiple services from one provider are “stickier” (i.e., they churn off at lower rates), and discounts are certainly an attractive feature. Apple’s calculus here is that it can boost overall subscribership and thereby boost its margins on the services.
But it’s an open question whether Apple One will produce a significant revenue lift. The age-old retailing strategy of offering more stuff for a lower price (so that you end up paying more than you otherwise would have) may not work in this case.
Fans of, say, Apple Music at $9.99 per month, won’t be inclined to pay a few bucks more just to get Apple TV Plus and Apple Arcade if they’re not interested in what those have to offer.
The most successful Apple subscription to date has been Apple Music, which had about 68 million customers as of the end of 2019, per estimates by Counterpoint Research. In that light, Apple One may ultimately represent the company’s attempt to try to push its less-popular services.
Some portion of the owners of Apple’s 1.5 billion-plus active devices will go for one of the Apple One plans. Superfans of all things Apple are the low-hanging fruit. But it remains to be seen how much of a lure the discounted bundles will prove to be, given the plethora of competing services available in each of the silos Apple is playing in.
The key for Apple to making its bundling strategy a success now “is all about strengthening its line of programming across the board,” says Paolo Pescatore, a U.K.-based analyst with PP Foresight.
The Apple One bundles, originally announced last month, are available in three plans:
Individual ($14.95/month, savings of $6): Apple TV Plus, Apple Music, Apple Arcade and iCloud (with up to 50 gigabytes of storage).
Family ($19.95/month, savings of $8): The same four services in the Individual plan with access for up to six members per account, including up to 200 GB of iCloud storage.
Premier ($29.95/month, savings of $25): Apple TV Plus, Apple Music, Apple Arcade, 2 terabytes of iCloud storage, along with Apple News Plus and the forthcoming Apple Fitness Plus service for virtual workout classes (powered by Apple Watch). As with the Family plan, services may be shared among up to six members.
Customers can sign up for Apple One on iPhone, iPad, iPod touch, or Apple TV running iOS 14, iPadOS 14, or tvOS 14. Later in the fall, you’ll also be able to sign up on Mac running macOS Big Sur.
To sign up, go to “Settings,” tap on your Apple ID and then tap on “Subscriptions.” Tap on the “Apple One” setting to see the plan that is recommended for you.
In addition, now when you sign up for individual Apple services, the right Apple One plan is automatically recommended if it’s “a better value,” according to Apple, taking into account any services you already pay for. The Apple One bundles will carry a 30-day free trial for any services that customers do not already subscribe to.
Separately, the tech company this summer launched its first bundle for Apple TV Plus subscribers: It’s offering ViacomCBS’s CBS All Access (with no ads) and Showtime together for $9.99 per month, which works out to slightly less than half the standalone pricing.
The challenge for Apple on this front is that streamers like Netflix, Disney Plus, Amazon Prime Video and HBO Max want to preserve their direct-to-consumer models — and haven’t shown significant interest in being part of content bundles that are outside of their control. Disney, though, offers a discounted three-way bundle of Disney Plus, Hulu and ESPN Plus. And subscription players have found certain tie-ups to be mutually beneficial, like Netflix with T-Mobile, Disney Plus with Verizon, and Hulu with Spotify.