Apple's (AAPL) iCloud Structure Designed to Save Customers Money (GOOG) (AMZN)
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Apple (Nasdaq: AAPL) should gain more from its cloud music services than what Amazon.com (Nasdaq: AMZN) and Google (Nasdaq: GOOG) will realize with theirs.
In fact, Apple may be saving customers money over the long haul -- words likely to make Amazon and Google wince.
When a consumer uses Amazon or Google's service, they're keeping files on a cloud, and using bandwidth for access to those files, sometimes by streaming them to their mobile device. The WSJ cites an example of the cost by using AT&T's (NYSE: T) model: AT&T charges $25 per month for 2-gigabytes of data, and an additional $10 for each additional gigabyte. Those numbers can add up fast, especially when watching a movie.
On the other hand, Apple's strategy has consumers storing content on their devices with the iCloud service. WSJ notes that, aside from an initial sync, a web connection isn't required.
How is this benefiting Apple? Apple charges about $100 more for a device with 32 gigabytes of NAND storage -- probably only costing $15 for Apple to purchase. Further, a 64-GB iPad is merely $100 more than the 32-GB version, suggesting a slightly lower mark up.
Moving forward, the cost of bandwidth is likely to go up, and some may even begin to charge for WiFi, meaning Google and Amazon better come up with a different strategy if they plan on taking down the Apple music empire.
In fact, Apple may be saving customers money over the long haul -- words likely to make Amazon and Google wince.
When a consumer uses Amazon or Google's service, they're keeping files on a cloud, and using bandwidth for access to those files, sometimes by streaming them to their mobile device. The WSJ cites an example of the cost by using AT&T's (NYSE: T) model: AT&T charges $25 per month for 2-gigabytes of data, and an additional $10 for each additional gigabyte. Those numbers can add up fast, especially when watching a movie.
On the other hand, Apple's strategy has consumers storing content on their devices with the iCloud service. WSJ notes that, aside from an initial sync, a web connection isn't required.
How is this benefiting Apple? Apple charges about $100 more for a device with 32 gigabytes of NAND storage -- probably only costing $15 for Apple to purchase. Further, a 64-GB iPad is merely $100 more than the 32-GB version, suggesting a slightly lower mark up.
Moving forward, the cost of bandwidth is likely to go up, and some may even begin to charge for WiFi, meaning Google and Amazon better come up with a different strategy if they plan on taking down the Apple music empire.
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