Apple Plans to Offer Subscription Bundles

A Range of Subscription Options for Customers

Apple (https://sofimobile.page.link/?link=https%3A%2F%2Fwww.sofi.com%2Fsofimobile%2Fwealth%2Fbrokerage_tearsheet%2FAAPL&efr=1&ibi=com.sofi.mobile&isi=1191985736&apn=com.sofi.mobile&ofl=https%3A%2F%2Fwww.sofi.com%2Fwealth%2Fapp%2Fstock%2FAAPL) is making plans to launch a series of subscription bundles which the company is calling “Apple One.” The new initiative will likely be rolled out in October along with the next iPhone. The packages will offer several services combined at a lower monthly price than Apple would charge customers for each one individually.

Apple will offer several different levels of subscription bundles. The simplest, lowest-cost option will include Apple Music and Apple TV+. Subsequent, more expensive levels would include the Apple Arcade gaming service, Apple News+, and extra iCloud storage.

Apple is also creating a line of virtual workout classes which will be included in some of its package offerings. These classes will compete with offerings from Peloton (PTON), Nike (NKE), and other companies which have seen booming demand for at-home fitness instruction during the pandemic.

Competing With Amazon Prime

Amazon (AMZN) has achieved an impressive standard of customer loyalty through its Amazon Prime subscription service. Apple, and other companies like Walmart (WMT), are trying to create competing models.

Apple also has hundreds of millions of loyal customers, though much of this base is more dedicated to Apple’s hardware products than its subscription services. Apple’s new approach will aim to change that.

A Steady Revenue Stream

During this time of economic uncertainty, investors have been eager to back companies with steady revenue streams. A robust monthly subscription service provides this type of reliability.

Apple’s services are already seeing increased adoption. During Apple’s fiscal third quarter, its services sector showed double-digit growth, generating $13.16 billion in revenue. Through the new bundling initiative, this arm of Apple’s business could see even more expansion.

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