This article is based on an article from the Japanese edition of Engadget and was created using the translation tool Deepl.

It's been said that "Apple is becoming more service-oriented.

Apple is launching a new service, Apple One, this fall. What will this look like? I'd like to analyze it here, comparing it with past Apple services as well.

20 Years of "Apple Service"

Apple is said to have increased its emphasis on services. It is true that "service" revenue has increased as a percentage of Apple's sales. However, I don't have a strong impression that Apple has become more "services-focused".

Very simply, it's just the way Apple interacts with its users that has changed.

In the past, Apple's offering of services was "to increase the value of the hardware". That hasn't changed much since iTools was launched in 2000. iTools was a free service for Macs that provided email, web site creation, and cloud storage, and if you bought a Mac, it came with the services you use most often and you could start using them the day you bought it. The service was later renamed ".Mac" in 2002, "MobileMe" in 2008, and became the current "iCloud" in 2011.

When the iTunes Music Store was launched in 2003 as a music distribution store in the US, it was positioned as a service where users could download and listen to music they had bought, and to take it with them, either by writing it to a CD-R or transferring it to a music player such as an iPod. The Mac (PC) was at the center, and the iPod, which was a peripheral device, played a role in adding value to the Mac (PC). The network service is necessary to make full use of the device.

Apple's content business initiatives started with music and spread to video with great success. As we all know, smartphone apps, which were not yet available to the world, have been even more successful than music. It's fair to say that Apple's "success principle" for the past 20 years, since the 2000s, has been to combine store and hardware into a "store to enhance the appeal of the device". However, e-books and news are "out there", to say the least. This is probably due to the existence of stronger general services outside, such as Amazon and web news.

From Mac-centric to "cloud-centric”

Meanwhile, the computer world has changed in those 20 years.

Initially it was "you have a Mac (PC) and use the Internet there from time to time", but it has changed to "you carry around peripherals such as music players, and the Mac serves as a hub to consolidate data", and then to "from iPhone to Mac, you use various devices in various places and at various times, so the data is all in the cloud". From the days when the device in your hands was important, it has become a matter of course that you can use the same data in the cloud from any device.

In this era, iCloud has become "a service that integrates accounts and data about Apple products". In the days of Mac and MobileMe, stability was said to be not so great, but now iCloud is much more comfortable. It wouldn't have started without iCloud, so the level of need for stability has changed.

There are some examples of platform companies like Apple acting as stores, but they are more of just "one layer" that includes apps as well. This is due to the increase in the number of "subscription" content providers such as Netflix. This is the result of the "anytime, anywhere, from any device" approach.

For Apple, which wants to increase the value of a whole range of devices, the "services are available outside" format is not enough. That's why the company has started offering game subscriptions and video subscriptions, which it hadn't done before. All of these are centered around experiences on its own hardware, with the goal of differentiating its own hardware, however, the company has been providing Apple TV service applications for TVs, no longer concerned with just the "close to own" form. This is probably because the value of content has increased in the realm of devices such as televisions, which the company neither produces nor sells.

Single products as well as "sold in packs" coexist, driving fans who "have more than one type of contract" to the Apple One

With the above premise in mind, I want to return to the Apple One.

Apple One itself has not yet been launched. However, our coverage has given us some idea of how the service is positioned. Apple One is a "set" of services offered by Apple with a discount. In Japan, the service is priced at 1,100 yen per month, which includes Apple Music, Apple TV+, Apple Arcade, and 50GB of iCloud storage.

Apple One prices. Individual plans cost 1,210 yen less than signing up for each of them as a single item.

Currently, if you sign up for each of them as a single item;

  • Apple Music: ¥980

  • Apple TV+: ¥600

  • Apple Arcade: 600 yen

  • iCloud storage (50GB): ¥130

So the total price is 2,310 yen. That's a saving of 1210 yen.

You might look at this system and think that Apple is trying to increase revenue by putting it all together. But that's not quite the case. Because it does not mean that stand-alone services will disappear, nor do they cease to be recommended. The order in which the services are set up is that if you want to use music, video, etc., the "single service" is recommended first, and then Apple One is offered to those who use more than one, in that order.

For storage, the Apple One portion of the storage will be added to the amount of space you have on a single contract, and the Apple One will not "override the single contract". For example, if you already have a monthly subscription of 2TB of iCloud storage and you sign up for Apple One, you'll have a total of "2050GB" of storage space.

The information from the single service will remain with Apple, and if you cancel the Apple One, you'll return to the "pre-Apple One subscription state" again. In other words, it's a minor detail, but if each service was "free" before the Apple One subscription, the free period does not expire and will revert back to the "original free period" when you cancel Apple One.

Because of this, we can assume that rather than trying to drive customers to Apple One, the company will first promote its single-service offerings and then try to connect customers who are on multiple services with the more affordable Apple One, rather than trying to get them to switch to Apple One. This is because Apple One has a pricing structure that "makes it more affordable for those who subscribe to more than one Apple service."

Using Apple One as a tool to "discount services to make the hardware look more attractive"?

On the other hand, there are some situations in which it is assumed that Apple One will be actively used. That's when it works with mobile operators and when it's time to promote Apple's own new products.

On September 23, UK cellular carrier EE announced a mobile plan that includes Apple Music, Apple TV + and Apple Arcade. In this format, it is easier to start with one package rather than adding multiple services in detail. Needless to say, when Apple works with mobile carriers to promote services, it's easier to pack them together as an "Apple One" package and offer further discounts.

EE in the U.K. announced a communications plan that includes Apple Music, Apple TV+, and Apple Arcade.

In Japan, KDDI offers a plan that allows unlimited use of Apple Music for six months, but a similar pattern of offering Apple One to iPhone subscribers for six months or a year is possible.

KDDI is offering its subscribers a free six-month subscription to Apple Music. This could be extended to Apple One, the author predicts.

The reason why I wrote at the beginning of this article, "It's not just about increasing service revenue," is because of this possible use of the service. In fact, when Apple TV+ was launched last year, it was advertised by offering a free year's worth of Apple products. It's possible that Apple One could become such a thing in the future.

In Japan, services and devices are increasingly being separated, but it's possible to "discount the service side and make Apple products more attractive". And only Apple can sell hardware in this way. For Apple, services are a way to make their products shine.

Related Article (Japanese):

Five-minute "Apple Event" summary. 4th Generation iPad Air & Apple Watch Series 6 Announced, Subscriber Bulk Discount Apple One

This article is based on an article from the Japanese edition of Engadget and was created using the translation tool Deepl. The Japanese edition of Engadget does not guarantee the accuracy or reliability of this article.