Apple is reportedly planning to release subscription bundles that make purchasing multiple services more affordable, according to Bloomberg. Sources familiar with the initiative said the bundles could launch as soon as October alongside the 5G iPhone series.
There will be multiple tiers of bundles, though the lineups aren’t fully set — the basic tier would likely include Apple Music and Apple TV+, while progessive tiers would mix in additional services such as iCloud storage, Apple Arcade, and Apple News+. Apple is also reportedly developing a fitness subscription service that would offer virtual workout classes, similar to existing products offered by Nike and Peloton.
US consumers will likely be more inclined to bundle services from Apple since the pandemic has reshaped their spending habits. For consumers who were already purchasing multiple services from Apple, bundling will be a no-brainer. But Apple is likely focusing its efforts on attracting consumers who, for example, own an iPhone and subscribe to Apple TV+, but listen to music on Spotify Premium, pay for a New York Times subscription, and are seeking a virtual replacement to ClassPass now that gyms are shut down.
The coronavirus pandemic has disrupted consumers’ shopping habits such that they might be more inclined to consider Apple’s bundled services: Over 75% of US consumers have tried new brands, places to shop, or shopping methods during the pandemic — and these behaviors are motivated by a desire for more convenience of value, according to a McKinsey survey of 2,024 US consumers conducted July 30 through August 2, 2020.
Apple’s service bundles also play into its efforts to make its tech ecosystem more affordable.To combat market saturation, Apple has added more affordable devices to the iPhone lineup over the last two years, such as the iPhone SE (2020), iPhone 11 (2019), and the iPhone XR (2018). Though Apple started these efforts pre-pandemic, they’re paramount amid an economic recession, since US consumers are opting for cheaper smartphone models.
For instance, the average purchase price of smartphones in the US fell 10% year-over-year (YoY) from around $560 in Q2 2019 to $503 in Q2 2020, according to Canalys. Further, Apple launched its cheapest-ever iPhone in Q2, the iPhone SE, which helped it achieve a 6.3 percentage point jump in market share from the same period last year, while competitors Samsung, LG, and TCL all reported a decline.
And in 2019, the iPhone 11 and iPhone XR were among the top five best-selling smartphones of 2019 in North America and Europe, per Counterpoint Research. Making services more affordable through bundles will help Apple align its services strategy with its push to make iPhones more affordable, helping Apple boost revenues during the global recession.
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