Amazon cloud services take a big bite out of Apple’s budget

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Some Apple services depend on Amazon’s AWS.
Some Apple services depend on Amazon’s AWS.
Photo: Amazon/Apple

As Apple increasingly turns its focus toward bringing in revenue from services and not just hardware, it’s depending on a rival to help provide some of the necessary infrastructure. The company reportedly spends $30 million a month for Amazon’s web services.

This is an example of coopetition between the two — they work together even though the two companies offer rival products.

They compete directly on smart speakers and on tablets. Amazon’s version of AirPods are expected soon. Each has their own ebook stores and streaming music services, and will soon go head-to-head in streaming video services.

Apple means big $$$ for AWS

But that doesn’t stop Apple from using Amazon Web Services (AWS). The iPhone maker spent $350 during 2018 on this services, and is on track to spend $360 million this year, according to CNBC. The two companies reportedly signed a contract that will see AWS raking in at least $1.5 billion over the next five years from Apple.

There isn’t a publicly-available list of every Apple service that’s hosted by AWS, but iCloud storage is thought to be one. It’s also possible Apple TV+ will depend on Amazon — Netflix uses this service extensively.

All this doesn’t mean Apple lets Amazon handle everything. The company is building up its own infrastructure, and plans to invest $10 billion in US data centers over the next five years.