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Bundling the $1,000 iPhone with free Apple Music and iCloud storage would be genius

Bundling the $1,000 iPhone with free Apple Music and iCloud storage would be genius


Not to sell more iPhones, but to nudge people into using more Apple services

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Here are three things I’m not interested in: a $1,000 iPhone, Apple Music, and paid iCloud storage. I’m neither an Apple hater nor a cheapskate; I simply prefer to spend my money on more tangible and lasting things than ephemeral subscriptions or the early-adopter tax for the latest and greatest iPhone of 2017. But an analyst note from Barclays has thrown up an intriguing possibility that could, all of a sudden, kindle my interest in Apple’s services and new hardware: what if Apple bundled free Apple Music and iCloud storage with the purchase of the top new iPhone model?

The Barclays analysis, as reported by Business Insider, proceeds on the presumption that Apple does indeed plan to throw in a year’s worth of Apple Music and 200GB of iCloud space with the purchase of its priciest iPhone. While it’s not immediately clear whether Barclays knows this or is guessing, I find just the idea itself a highly appealing and clever way to help new iPhone buyers overcome the initial shock of paying four figures for a device. Barclays conducted a survey showing that people’s purchasing intent for the new iPhone dropped in half when the price went from $800-something to $1,000 or above. With a nominal value of $156 for the proposed bundled Apple services, buyers of the $1,000 iPhone wouldn’t be paying all that money just for a device.

Google’s Pixel and Photos integration illustrates how well this can work

Now, I know that this sounds dangerously close to the PC bundle deals many of us fell for around the year 2000. Buy this beautiful beige box, tinny speakers included, and get this Amazing Multimedia Software Bundle! with it, for an added value of some hundreds of imaginary dollars. I probably still have some of those CDs with crappy garden-planning software on them in an attic somewhere. But the modern age of value-adding software and services is a lot more robust than that. My biggest problem with Apple’s storage and music services is simply the cost of using them to their fullest. If Apple wants to offer them for free with its new device, I’m immediately much more open to the idea.

For a good illustration of how well this scheme can work for Apple, just look to Google and its Pixel phones launched last year. Google decided to allow unlimited storage of photos and videos shot with the Pixel and Pixel XL — at full resolution and maximum quality — inside its Google Photos app. At a time when every other cameraphone backup solution was either paid or limited in some fashion, only the Pixel + Photos combo from Google gave users unlimited, anxiety-free image storage. This was a powerful enough draw to even pull me in, after I’d previously dismissed Photos for being overbearing and practically demanding that I upload every shot I take to Google’s servers.

What Google understood very well was the synergistic potential of a bundle deal: people might not buy the Pixel just because of its free storage, but once they do, they’ll feel good about having that privilege, and they’ll be encouraged to make greater use of the Photos backup. For a company that just wants to get as many Android devices in people’s hands and as many loyal Photos users as it possibly can, the free Pixel cloud storage was basically a no-brainer move. It’s certainly turned me into a loyal Photos user in less than a year, and I continue to rely on it to organize my photos even when I’m using the HTC U11 and LG V30. That’s the benefit of user inertia that Google is also profiting from.

Owners may grow to like Apple’s services — or become reliant on them

Web services aren’t quite as instrumental for Apple as they are for Google, but they’re still the Cupertino company’s fastest-growing business segment. Bundling the usually paid-for Apple Music and the expanded iCloud storage in with the new pricey iPhone is likely to have a similar effect to the one I experienced with Google Photos and the Pixel. It will nudge people toward using services which they might not otherwise have done. After a year’s time, they might feel much more at ease with paying for the full thing. Or, even better for Apple, they might end up reliant on all that extra storage and easy music access and find themselves needing to pay for them.

I know it can sound silly to suggest that a subscription price might be a hurdle to someone paying $1,000 for a phone, but our scales of value tend to shift dramatically when we move between hardware and software. I don’t doubt that Apple will sell out its limited supply of super-premium new iPhones (much as it struggled to keep up with demand for the jet black iPhone 7 Plus), but bundling in some desirable freebies along the way could make people feel even better about their purchase and also get them to try some new services.

Apple has already shown a willingness to distribute Apple Music as a free bonus, with mobile operators like EE in the UK offering six months of access to the all-you-can-listen service with new contracts. That’s just part of the company’s enticement to bring more users on board and scale up without explicitly discounting the service. Personally, I’d prefer that Apple offers free Apple Music for the lifetime of the $1,000 iPhone (and maybe limit it to that one specific device) over a one-year subscription, but I can see both methods having the desired effect. And that effect would be to use the hype and starry-eyed anticipation for an exclusive new iPhone to promote and accelerate the growth of Apple’s services.