[andrewljohnson]

Consider iCloud — Apple now offers free-of-charge online services ad-free. It’s a sunk cost in the name of the overall experience for Apple device buyers.

BS, iCloud has paid upgrades, and I imagine those paid upgrades make the rest of the model break even or better, just like DropBox. It's not ad-model vs. devices-model, it's freemium product tacked onto device sales, further enhancing margins.

Glib, but wrong.

[irons]

The statement you're quibbling with — "free-of-charge online services ad-free" — is unassailable. Anyone signing up for iCloud with the intention of using it for data sync (contacts, calendars, browser bookmarks), and/or application data, and/or the ability to track, lock, and wipe lost devices, will be hard-pressed to exceed the free 5GB.

Sure, iTunes Match or syncing several devices directly to iCloud might induce a heavy user to pay for more, but iCloud remains a bona-fide free service for the vast majority of its customers.