As Apple and Amazon compete for a greater share of consumer dollars and attention, they also have a particularly intimate business relationship: Apple is spending more than $30 million a month on Amazon’s cloud, according to people familiar with the arrangement.
Apple’s cloud expenditure reflects the company’s determination to deliver online services like iCloud quickly and reliably, even if it must depend on a rival to do so.
As Apple’s top product, the iPhone, approaches market saturation, the company has begun pointing more to online services as a key contributor. Recently, the company stopped disclosing unit sales for iPhones and other hardware products, and started disclosing the profit margin for its services business, which includes the iOS App Store, AppleCare, Apple Pay and iCloud. Apple also introduced new subscription services for video and magazines last month.
People use more than 1 billion Apple devices each month, and accordingly, Apple has considerable computing and storage requirements. The company is investing heavily to build out its own infrastructure: In January of 2018, Apple announced plans to spend $10 billion on data centers in the U.S. in five years. In December of 2018, Apple said it would spend $4.5 billion of that