Most technological fashion words prove to be short -term modes. But Cloud Computing, an obsession with industry long before AI and space computer science reached the spotlight, quietly kept its early promise to a degree that becomes a problem for Apple's results.
The idea of Cloud Computing is simple: users unload the data, applications and processes of their devices and store them in the cloud, by which we simply mean the servers of a third party. As long as you have access to a reliable internet connection and trust the security and confidentiality identification information of your cloud supplier, this makes life easier. It is easier to work on several devices, and the storage burden on each device becomes much lighter.
The problem, with regard to Apple, occurs when customers get used to a lighter storage burden that they reduce their equipment purchase requirements.
Wednesday, the analyst company consumer intelligence Research Partners (CIRP) published a new report entitled iPhone Are buyers to count on the cloud? This has revealed that premium iPhone customers become less inclined to spend more on additional storage.
During the quarter finished in December 2024, the proportion of high-end buyers (which means that the buyers of the iPhone 16 pro and 16 pro Max) who paid storage beyond the reference allowance were From 44%, against 48% for equivalent models in the equivalent quarter a year earlier. Likewise, upgrading storage among buyers of “headlights” models (the iPhone 16 and 16 Plus, or 15 and 15 more the previous year) increased from 48% to 42%.
This may not seem much, but these small percentages add up quickly, especially when the additional billing for more storage has long been one of the most reliable sources of income in Apple. A basic line (256 GB, $ 1,199) iPhone 16 Pro Max has a big beneficiary margin, but that turns pale compared to the 1 TB model, $ 1,599 because storage components are simply not so expensive – not far. (Admittedly, this is a huge simplification, but search for an SSD of 1 TB on Amazon and see if it costs you $ 400.) In material terms, storage upgrades are about as close to the profit pure only for Apple.
The iPhone Pro Max started for 256 GB of storage for two years, while other models have all 128 GB.
Connor Jewiss / Foundry
This makes it a problem when customers are increasingly discharging their data in Apple Music or Spotify cloud -stretching songs, storing photos and videos in iCloud – and there is not the same need 'A large storage allowance. The quantity of storage that Apple currently offers with its reference iPhones is sufficient for most people, and it costs the business.
Of course, an agile and prospective company can pivot to a certain extent and earn money from this trend in other areas. Apple Music himself is a income driver, just like iCloud. Services are indeed a coherent growth zone … But again, in the fourth quarter of 2024, the entire service service (which includes the App Store, Applecare, and many other things that are not linked to Cloud Computing) brought in $ 25 billion in revenues, compared to the $ 46.2 billion in the iPhone. It is not really comparable.
At the same time, the trend is not universal, and the CIRP has really seen a increase In the storage of improvements among buyers of remaining “inherited” phones, which increased from 38% to 48%. It's additional money.
Until then, and that's it. It is not surprising that inherited buyers are more inclined to pay additional storage, in part because they start by less (the basic line is only 64 GB for the iPhone SE) and in part because that phones and upgrades are cheaper. The 64 GB's basic iPhone is currently $ 429, while the 256 GB model is $ 579. It is a maximum selection of $ 150 on a device that starts with a much lower profit margin in the first place.
Can we expect an iPhone 17 of 64 GB, because Apple tackles this disturbing trend? Probably not. I suspect that the cat is out of the bag with regard to cloud computing, and expensive storage improvements can become something in the past, with the exception of a smaller niche market that requires unusual storage allowances For professional reasons. But this is bad news for Apple, and we should not be surprised if prices are starting to crawl while the company seeks to strengthen its beneficiary margins in other areas.
