

Ask HN: Is iCloud a sustainable offering? - kaptain

I can understand how Google and Facebook offer their products for "free". They aren't free: users' online habits are sold to 'relevant' advertisers. One of sJobs selling points about the iCloud services was that it was going to be ad-free. Specifically, he talked about Mail being ad-free but his disdain for ads can easily be extended to the other parts of the iCloud suite.<p>On the surface, it seems like this is a way to attract users to the iOS/MacOS platform. In addition, once users have an Apple ID, they could easily access iTunes, iBooks, i$Consumable, thus generating more revenue. Is this a sustainable model though?<p>Part of the business equation here is to ask how much more revenue would be generated from offering iCloud. For the person that would use iCloud purely as Dropbox+ (i.e. myself) it seems like this would result in a loss for Apple. From a business perspective, you can't really justify iCloud if people who were going to buy books, music, etc. would have bought them regardless of iCloud. While iCloud is compelling for the user, it doesn't <i>seem</i> as compelling from the business side. Further, can Apple really deliver on this promise of 'free for everyone'? How would you evaluate/critique iCloud?
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steventruong
This is obviously purely speculation but...

1\. A lot of the newer Mac users are more or less probably like me. I use to
be a hardcore non-Mac type of guy (I didn't want to use the term PC; too
broad). I started with the iPod. Then the iPhone. Through the experience, it
made me want to try the Mac, especially since for the first time ever, I had
friends that were Mac users. Eventually in 2007, I became a Mac guy all of a
sudden. The point of that story is others took the same path. A great offering
by Apple to enhance the experience does indirectly translate to more revenue
for them if the experience is going to convert them to other Apple products
and services.

2\. iCloud does charge for iTunes Match and while Jobs never said there was
any other premium charge for the service, we can't assume everything is free.
One thing he mentioned was the storage would be capped at 5GB. There's no
telling if there would be a premium cost for people who want more storage
(think Dropbox model).

3\. This is only a sample of what iCloud is currently offering. More Apps in
the future, probably both by Apple and 3rd party developers will probably
integrate with the Cloud and its hard to say whether or not Apple will charge
a premium for certain services whether directly to consumers or to the
developers.

Only time will tell but I don't think they'd do this at a loss without
thinking through a strategy. Things don't always work out as planned, not even
for Apple, but one thing Apples does do well is plan ahead.

~~~
sleepyhead
2\. In the iCloud settings there is an indicator for storage plan and under
"storage and backup" there is a "buy more storage" button. I think also Steve
mentioned this in the keynote. No prices released though.

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tobylane
Microsoft's online services don't have many ads, and they lose half a billion
a year (9 billion this year including Skype). Apple have bigger cash reserves,
bigger profits, and so on. If you're drawn to Microsoft because of their
online services what do you buy? Other than the Xbox, 7 and Office (direct
sales of 7 and Office are probably small) it's all third party
hardware/software. With Apple, there's an ecosystem over several high quality,
high profit items.

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petervandijck
"people who were going to buy books, music, etc. would have bought them
regardless"

Yes, but they'll buy them _with you_.

~~~
kaptain
What I was trying to say was that, you can't justify iCloud if people were
going to buy books, music, etc. _from you_ regardless of whether you released
iCloud. If those folks were going to buy from you, having iCloud would just be
an expense, because for those customers, it didn't matter whether you had
iCloud.

~~~
petervandijck
If folks are going to buy from you _regardless_ , then yes, anything you do
that costs money is a waste. But clearly customers aren't going to use Apple
regardless of the competition.

