One bundle to rule them all

Friday, Aug 14th 2020


"Debundling" has been a major and highly visible theme across many of the economic disruptions in we've seen over the last decade.

Cable TV has been debundled into individual streaming subscriptions; enterprise software suites have been debundled into specialized products; even newspapers have been debundled into topic-oriented subscription offerings.

However, for businesses that are able to deliver outstanding consumer value propositions and invest heavily in upfront fixed costs, "bundling" may be in fact be the future.

For example, this week reports emerged that Apple is set to release a subscription services bundle (dubbed "Apple One"), which would offer its video, music streaming, gaming, and news subscription services all under one monthly package.

We see this news as a major step towards the ultimate "Apple-as-a-Service" end-state that we outlined last year in our deep dive on Apple. It's analogous to what Amazon did with Prime, starting with free shipping and evolving to encompass video, music streaming, cloud storage, and even grocery discounts.

Apple has over 1 billion active devices globally, and each device is effectively a mini retail store offering you add-ons like Apple Music. Historically, Apple has put an individual price tag on each item in the store. Often times, it results in sticker shock and lower adoption ("Eh, I'll just use Spotify's free plan").

But unlike channels in a cable TV bundle, Apple's offerings make each other easier to use. Your devices share your data via iCloud, leverage your Apple Pay credentials, etc. They form a ubiquitous, seamless ecosystem. By bundling those offerings at a discount to the prices you'd pay a-la-carte, Apple should drive greater customer adoption, retention, and satisfaction.

In an age where every product bundle is seemingly at risk, companies focused on ecosystems may be only "Ones" left standing.

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