Apple (NASDAQ: AAPL) is allegedly considering charging for its supposed new service, a cloud-music storage space, according to a report from Cnet. The cloud-storage for the much beloved iTunes libraries will cost customers after an initial trial period, although the specific charges have not been discussed.
Other companies don’t charge of their Cloud services, Amazon (NASDAQ: AMZN) being the first that comes to mind. Earnings for the company fell today; however, after its continued technological expansion took a toll on Amazon's operating margin. The development of cloud services can be expensive to develop and maintain and although it would be presumptuous to say it had a major affect on the company’s quarterly earnings, the fact remains that storage of that size can be pricey and that with non-paying or delayed payment options (free until 5G of storage), it's unclear how Amazon will make up for the development costs.
Apple devotees are willing to pay for just about anything from the company, but with options like Amazon’s, will they pony up the dough for a pay for use cloud storage? Google (NASDAQ: GOOG) is also reportedly considering asking users to pay for its as-of-yet unannounced cloud storage music service, according to the report.
With the major tech leaders all releasing or having recently debuted cloud storage programs, it will be interesting to see which of them manages to design the best business model. One that effectively combines a superior interface with a solid plan for gaining popularity and collecting profits. Cloud drives are expected to become increasingly attractive people become more reliant on their smartphones, meaning there’s a lot of pressure on these tech coportations to land as much of the market share as possible early on. Companies still need to figure out how to make money off these cloud sources; however and the one that develops a plan that people can live with and that the company can generate revenue from will most likely see it reflected in eventual share prices.
Investors may want to keep a close eye on these companies and the buzz surrounding these emerging programs as they have the potential to play a larger role in earnings than we may realize today.
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