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?
This is obviously purely speculation but...<p>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.<p>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).<p>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.<p>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.
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.