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Apple’s Quiet but Revealing iCloud Move

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Consolidating iCloud domains

In February 2017, Apple (AAPL) made a subtle but revealing move. The tech giant acquired the iCloud.net domain, which had been hosting a social network in Asia. Following the acquisition, iCloud.net announced that it would shut down and that its user data would be deleted.

Apple already owned several iCloud-related domains before the acquisition, including iCloud.org and iCloud.com. By taking control of the iCloud domains, Apple reduces the risk of its iCloud customers straying to unrelated sites. The acquisition of iCloud.net can be seen as part of Apple’s efforts to consolidate the iCloud domains under its control. 

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Services business in focus

iCloud is one of Apple’s service businesses (QQQ). Through iCloud, Apple offers cloud storage services that are available by subscription. Pricing for iCloud varies by region.

In the US (SPY), for example, iCloud prices start at $1 per month for 5 GB of storage and reach $20 per month for 2 TB (terabytes) of storage. As a result, iCloud revenues are recurring and predictable, making them a vital component of Apple’s Services unit.

Doubling Services revenues

As Apple pushes toward doubling its Services revenues by 2020, iCloud is expected to contribute to that goal. Apple realized that iCloud.net was diluting its iCloud business, and its acquisition of the domain should eliminate that risk. The move could strengthen Apple’s competitive stance against Alphabet’s Google (GOOGL), Microsoft (MSFT), and other rivals in the services market.

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