Apple aims to keep customers loyal with new subscription bundles

Linda J. Dodson

Apple is planning to challenge Amazon Prime and Netflix with a wave of new subscription bundles to encourage users to sign up to its TV and music apps as it looks to life beyond the iPhone.

The iPhone maker is expected to encourage consumers to pay a monthly fee for its Apple TV+, Apple Music and iCloud subscription products to boost its $50bn (£38bn) annual “services business”. 

It will bundle these products together into a subscription package called Apple One. The offering will include different tiers of membership and offer a discount to users who sign up to more than one service. 

The package could help convert more of its 1.5 billion global iPhone users into paying subscribers. So far, Apple has an estimated 68m Apple Music customers, while its Apple TV+ service has 33m, according to Ampere Analysis. 

In comparison, Netflix has around 192m users, Amazon has 150m Prime members, and Spotify has 138m subscribers.

Analysts have predicted Apple’s growing services division could be a $100bn business. It has grown quickly even as overall sales of iPhones declined. Last quarter, Apple made $13bn from this software side of its business, more than it makes on MacBook computers, Apple Watches or iPads.

The Apple One package is expected to be announced in October. According to Bloomberg, packages would start with Apple Music and Apple TV+ with options for its gaming service Apple Arcade, its Apple News+ service, and iCloud storage. 

Packages would save users between $2 and $5 per month, the report said. Apple said it did not comment on rumours or speculation.

It is also considering bundling hardware devices, such as its TV box, with games and video services. A further offering being developed is a sports fitness app to rival exercise bike company Peleton. 

The news sent Apple’s share price up 2.6pc, inching it closer to a market cap of $2tn. Apple is now worth around $1.98tn, having broken the $1tn market just last year. 

In September, Apple is expected to reveal a new 5G iPhone. This faster network speed would allow the phone to download videos and games faster, complementing its subscriptions.

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