Why is iCloud Free?

With the recent purchase of Instagram by Facebook, there has been a lot of chatter online about free services.

It all boils down to something pretty simple. If you don’t pay for a service, you will either:

  • See ads
  • Be sad when the service is bought or folds

The reality is that free services can’t run forever without one of those two things happening. In the case of Instagram, the service was bought by a company that offers a free-to-users-but-with-ads service. (It just so happens the service is disliked by many nerds, hence the outcry online.)

Where does iCloud fit in to this? iCloud isn’t backed by piles of VC money, nor is it paid for by ads. Does that mean that it will go away one day?

Surely not, because iCloud is the exception to the rule.

Unlike the iTunes, iBooks and App stores, iCloud has no way of making money directly. It’s a big, bold red line on the books. But Apple made and gives iCloud away because it makes their hardware more desirable.

While Apple considers itself a software company, its hardware is what pays the bills. It uses its software to sell its hardware.

iCloud makes iOS devices and the company’s online stores easier to use. iCloud makes it easier to spend money within the Apple ecosystem.

Why would Apple ever charge for that?

Update: Tons of people have been telling me iCloud isn’t free for all users. I do understand that some people pay for more storage space, but my guess is that most users don’t have that need. (In fact, I pay for additional storage, but I have three devices tied to my account.)