Bloomberg: Apple’s bundles to be a twist on Amazon Prime

Like Amazon Prime—only without the warehouses and delivery trucks.

From Mark Gurman’s “Apple Readies Subscription Bundles to Boost Digital Services” posted early Thursday:

Apple Inc. is readying a series of bundles that will let customers subscribe to several of the company’s digital services at a lower monthly price, according to people with knowledge of the effort.

 The bundles, dubbed “Apple One” inside the Cupertino, California-based technology giant, are planned to launch as early as October alongside the next iPhone line, the people said. The bundles are designed to encourage customers to subscribe to more Apple services, which will generate more recurring revenue.

There will be different tiers, according to the people, who asked not to be identified discussing private plans. A basic package will include Apple Music and Apple TV+, while a more expensive variation will have those two services and the Apple Arcade gaming service. The next tier will add Apple News+, followed by a pricier bundle with extra iCloud storage for files and photos.

The initiative is a major bid by Apple to achieve the same loyalty that Amazon.com Inc. has won with its Prime program, which combines free shipping with video streaming and many other services for an annual or monthly fee. This bundle is the bedrock of Amazon’s success and has been mimicked by other companies before with mixed results.

Apple has no e-commerce delivery and warehouse network like Amazon’s, however it has hundreds of millions of ardent hardware customers who have already embraced some of its digital subscriptions.

My take: Let’s hope they’re priced to sell.

See also: Jim Cramer: Tim Cook will be a ‘titan of industry’ (video)

12 Comments

  1. David Baraff said:
    Off topic: @Joe Bland: Remember when AAPL was around $430 or $440 and I said that having just crossed the $400 century mark that I had no doubt it would be back at a century mark again real soon? Be prepared for a friendly, but well-timed “I told you so” from me to you.

    (OK: I do admit it I thought it would the $400 one. Not the $500 one.)

    2
    August 13, 2020
    • Lalit Jagtap said:
      I thought half-century mark, so sold few covered calls for Aug 28 expiry for a strike price of $450.

      0
      August 13, 2020
  2. David Baraff said:
    AAPL going private by spending 2 trillion dollars to purchase all of its stock seems a stretch, don’t you think? I mean, heck, if the company were a mere 1 trillion dollars…

    … it would still seem a stretch, don’t you think?

    @Joseph Bland: I don’t understand how borrowing money gets your to net cash neutral. I thought net cash neutral merely means the money is simply not accumulating? which requires either to massively (a) spend more (unlikely) or (b) buy even more stock or (c ) massively increase the divident (I wish! but unlikely in one big jump).

    Or do I not understand what net cash neutral means? (It doesn’t mean just having $0 dollar in the bank does it? In which case borrowing as much money as you have gets you there, though in this case I don’t understand what the point of doing that is)…

    0
    August 13, 2020
  3. Peter Kropf said:
    Hi Joseph,

    You wrote, “I might add that, if you use debt to repurchase shares, you don’t have to “repatriate” cash, which means you don’t have to pay taxes on it….”

    I thought ‘repatriating’ cash is no longer a significant issue because of the 2017 tax law.

    The way I read this
    https://www.taxpolicycenter.org/briefing-book/how-does-current-system-international-taxation-work
    is that the new tax law makes the issue of foreign income almost insignificant because no matter where the income is made a US company will pay foreign taxees at a rate pretty close to internal US tax rates.

    0
    August 14, 2020

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