As far as Apple launches go, the roll out of Apple’s bundled service offering - Apple One - was unusual. No Spike Jonze directed commercial, a coming soon banner over the Apple Fitness section of the website, and (for obvious reasons) no lines at the Apple Store. The only real PR or marketing we have seen in recent weeks came in the form of Tim Cook confirming on Apple’s Q4 earnings call that Apple One would be made available the following day. For a subscription bundle that media observers have hailed as the foundation of the company’s future services strategy, this is all feels a bit … underwhelming.
It’s hard to believe that the quiet launch of Apple One is due to the company’s marketing group dropping the ball. Apple’s brand management is simply too choreographed (and funded) to fumble a major product roll out. So if we assume that the relatively low-key marketing campaign was, in fact, intentional – then it becomes interesting to discuss why that decision was potentially made. There are a couple of reasons this could be the case:
The Optics Today Endanger the Vision for Tomorrow: From day one, Apple has framed its various service offerings as a means to deepen consumer engagement with Apple’s closed ecosystem of hardware. However, in a closed ecosystem the line between an integrated solution and an anti-competitive practice is razor thin. In the case of Apple One, the benevolent view of Apple’s strategy is that the company is passing along cost-savings to consumers in exchange for the opportunity to expose them to new products. The malevolent interpretation? Apple is, in the words of Spotify, “using its dominant position and unfair practices to disadvantage competitors and deprive consumers by favoring its own services.” Unfortunately for Apple the lawsuit that Epic Games brought against Apple in August has heightened awareness of that latter narrative – inviting both scrutiny by regulators and endangering the lucrative commission fee structure of the App Store that makes up 30%+ of Apple’s current services revenue. This precarious position makes drawing attention to any manifestation of the walled garden a particularly fraught endeavor, and Apple may very well have chosen to temporarily keep quiet in order to avoid undermining its position in the Epic legal battle.
The Pitch Doesn’t Match the Reality… Yet: On paper, Apple One creates a first of its kind, cross-category entertainment solution that grants consumers access to music, film/tv, gaming, fitness, and news content with cloud data storage thrown in for good measure. With the exception of Apple Music, however, the various services offered in the Apple One bundle are still building towards the critical mass of content necessary to retain users in today’s ultracompetitive media environment. That’s not to say that there isn’t meaningful potential here – after all Apple TV’s Ted Lasso may very well be the best show of the year – but the many products included in Apple One (Apple Arcade, AppleTV+, Apple News+) are too early in their life cycles to drive sustainable demand even at a bundled rate. A minimal marketing campaign could be seen as Apple acknowledging that entertainment offerings still need time to establish sticky value props (and in the case of Apple Fitness+ – actually launch) before it puts the weight of the company’s marketing machine behind the bundle.
To be clear, we at Spotlit believe that Apple One will evolve over time and become a crucial component of the Apple ecosystem. The issues discussed above have more to do with timing than with the underlying concept of the product. That concept – a recurring revenue base of services that reinforces the company’s core flywheel of connected hardware and enables expansion into various complementary categories - will serve as an important foundational component in Apple’s revenue mix as it looks to evolve beyond the iPhone. But the anticlimactic feel of Apple One’s launch is yet another example of how corporate culture has shifted in the years following the death of Steve Jobs. In many ways Apple has become a modern version of the conservative tech giants it once nimbly ran circles around, and the decision to go to market quietly strikes this author as a sign of a new phase for the company - one of practical maintenance vs. disruptive trendsetting.
