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Apple Is About to Announce Its Most Important Product Ever, and It Isn’t an iPhone

Sure, we’re all waiting for the iPhone 12. As far as anyone can tell, it’ll probably arrive sometime in October, just a few weeks later than the device’s traditional September launch. 

While the iPhone 12 is sure to be a big deal for Apple, there’s an even more important product coming this fall and it isn’t an iPhone, or an iPad, or a Watch.

According to Mark Gurman at Bloomberg, it will be called Apple One.

I actually called this back in October 2019 when I wrote that Apple should introduce an all-in-one subscription plan that includes AppleTV+, Apple News+, Apple Music, iCloud, and Apple Arcade. Later,  reports suggested Apple was actually considering such a move to be announced this year.

At the time, I called it Apple+. To be fair, I was wrong about the name, but in concept, this is exactly what I thought Apple should do. I’m not claiming any sort of magical foresight, it just seemed obvious to me that Apple could leverage its user base to convert more subscription revenue by bundling multiple services together at one lower price.

Apple’s services division has been its most important business in terms of growth for a while now. On its own, it generates more than $50 billion a year in revenue, which, for comparison, is larger than Delta Airlines or American Express. It also puts it not far behind Disney or Facebook in terms of revenue without even taking into consideration the company’s device sales.

The introduction of the updated iPhone SE earlier this year seems to have been a major win for Apple, especially in terms of capturing more budget-conscious buyers that would have previously opted for a lower-cost Android device. Also, the upcoming iPhone 12 is expected to drive a massive upgrade cycle. Still, neither of those two things is nearly as important to Apple as services. 

Here’s the thing: In order for Apple to make money off of iPhone users, it has to sell them a new iPhone. That’s been a pretty successful model, except, as the smartphone market has gotten more saturated, it’s gotten more difficult. Also, Apple makes roughly the same margin on each new generation of iPhone. Those dollars are certainly important and are largely responsible for the fact that Apple is the most profitable company on earth, not to mention the most valuable. 

I have no idea how the figures break out, but if I had to guess, I’d bet that iCloud users primarily use it for backing up their iOS devices and Photos. I don’t know anyone who uses it as their primary cloud storage service for their Mac. All of these services are really an add-on to the iPhone.

As a bundle, Apple could easily add incremental revenue above and beyond with each iPhone sale. You’re already planning to sign up for Apple Music, Apple Arcade, and iCloud? Now you can add Apple TV+ and Apple News+ for only a few dollars more. 

In fact, Apple News+ and Apple TV+ are fine, but if we’re being honest, there’s nothing remarkably exciting about either as standalone services. As an added benefit, however, they become a reasonable incentive to sign up for Apple One, instead of simply subscribing to one or two services individually. Those few dollars may not seem like much, but honestly, month after month they add up to real money.

This is exactly what Apple is counting on, and it’s why I think Apple One is the company’s most important product launch this year. Maybe even ever.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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