With the Services business evolving as a vital cog in Apple Inc.'s AAPL wheel, the tech giant is reportedly working on offering subscription bundles to boost its digital services.
Apple is closing in on a $2-trillion market capitalization.
What Happened: Cupertino is working on subscription bundles dubbed "Apple One" to offer customers its digital services — including video, music, news and fitness — at lower per-month pricing, Bloomberg reported, citing unnamed people with knowledge of the effort.
The endeavor is something similar to the Amazon.com, Inc. AMZN Prime subscription service, which includes free two-day shipping and other services as music and video streaming.
Apple could make an announcement with respect to the subscription bundles as early as October, alongside the launch of the iPhone 12, according to the Bloomberg report.
The bundles Apple is working on will likely lead to customer subscriptions for more Apple services, translating to more recurring revenues.
Tiered Bundling: Apple is reportedly considering offering tiers of subscriptions, with a basic package comprising Apple Music and Apple TV+.
A second tier would likely include these two services along with the Apple Arcade Gaming Service, and a third tier would add Apple News+, Bloomberg said, citing its source.
A pricier option would add extra iCloud storage, according to the report.
Apple is also reportedly working on a subscription for virtual fitness classes that can be accessed via an app for the iPhone, iPad and Apple TV.
This workout package, codenamed Seymour, would be in competition to similar virtual classes offered by Peloton Interactive Inc PTON and Nike Inc NKE, Bloomberg said.
These bundles will likely help consumers reduce spending relative to the amount they would have to cough up if they were to subscribe separately to each of Apple's services. The move is also seen as a loyalty building exercise by the tech giant.
AAPL Price Action: Apple shares were trading 2.11% higher at $461.59 at last check Thursday.
Photo courtesy of Apple.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.