Please ensure Javascript is enabled for purposes of website accessibility

Why Apple Music Is the Anchor for Apple One

By Evan Niu, CFA – Sep 17, 2020 at 10:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Mac maker is taking a shot at Spotify.

Apple (AAPL 4.86%) unveiled its long-anticipated Apple One subscription bundle earlier this week, offering discounts for consumers that sign up for multiple services, with pricing ranging from $15 to $30 per month. Bundling services together is a time-tested strategy to boost retention and reduce churn, while encouraging new users to sign up for the savings.

Apple Music is the clear anchor for Apple One, overshadowing the other included services. Here's why. 

A MacBook displaying an Apple TV+ show, an iPhone displaying Apple Music, and an iPad displaying a game

Image source: Apple.

Music streaming plus a bunch of mediocre services

For starters, here's a breakdown of the different tiers.


Included Services

Family Sharing



Apple Music

Apple TV+

Apple Arcade

iCloud Storage (50 GB)


$14.95 per month


Apple Music

Apple TV+

Apple Arcade

iCloud Storage (200 GB)


$19.95 per month


Apple Music

Apple TV+

Apple Arcade

Apple News+

Apple Fitness+

iCloud Storage (2 TB)


$29.95 per month

Data source: Apple.

If you look at the services other than Apple Music, the simple truth is that they're not particularly competitive or they lack broad appeal.

The Cupertino tech juggernaut gave away a free year of Apple TV+ in 2019, acknowledging that it didn't stack up well even at the aggressive price of just $5 per month. Apple Arcade is compelling at the same price point, but mobile gaming has a relatively niche audience and not everyone plays games on their phones. Cloud storage is extremely commoditized and table stakes. Nobody really signs up for Apple News+ and publishers are disenchanted. It's too early to know what Apple Fitness+, which launches later this year, will look like.

On the other hand, everybody listens to music. Apple has been a prominent stakeholder in the music industry for the past two decades and prides itself on having revolutionized digital distribution with iTunes, but Spotify (SPOT 5.75%) was an early mover in music streaming and has become the global leader in paid music-streaming subscriptions. Apple Music is mostly competitive with Spotify on its merits. 

In addition to competitive implications, there are cost concerns. Standalone Apple TV+ and Apple Arcade subscriptions already support Family Sharing at no additional charge, allowing those services to be shared with up to six family members. Those services have no incremental costs associated with increased usage and engagement, unlike all music-streaming services, which must pay per-stream royalties. That's why the Family plan costs $5 more than the Individual plan per month (the costs of the extra cloud storage are negligible).

Taking a shot at Spotify

Another way to frame Apple One is that the offering is really a way to sell more Apple Music subscriptions by drastically discounting the less competitive services that are included. While Spotify reports paid subscriptions quarterly because music streaming is its core business, Apple has been suspiciously silent.

The Mac maker instead gives irregular updates when it hits milestones, the last one being 60 million paid subscribers in the summer of 2019. Apple Music should be at 70 million paid subscribers, yet investors haven't heard a peep out of Apple, and the silence speaks volumes.

Chart comparing Spotify's and Apple's total paid users

Data source: Apple and Spotify. Chart by author.

There might be some other reason why Apple hasn't given investors any updates around Apple Music subscribers. Regardless, Spotify sees Apple One as a direct threat.

"Once again, Apple is using its dominant position and unfair practices to disadvantage competitors and deprive consumers by favoring its own services," the Swedish company said in a statement following the unveiling. "We call on competition authorities to act urgently to restrict Apple's anti-competitive behavior, which if left unchecked, will cause irreparable harm to the developer community and threaten our collective freedoms to listen, learn, create, and connect."

Evan Niu, CFA owns shares of Apple and Spotify Technology. The Motley Fool owns shares of and recommends Apple and Spotify Technology. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Stock Quote
$148.03 (4.86%) $6.86
Spotify Technology Stock Quote
Spotify Technology
$79.42 (5.75%) $4.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.