Apple uses software / cloud services as a way of selling expensive hardware, and the margin (if any) made on its cloud services is a rounding error on the overall P&L.
EDIT: Generally, the 'Apple insources everything' meme is a massive oversimplification. Apple insources when there is a competitive advantage to doing so. Apple insources its chip development because it is able to get better thread performance on its phones when the software is aligned tightly to the chipset. Apple insources Cobalt because you need Cobalt to make smartphones and if others find it difficult to source Cobalt, they're going to find it hard to make smartphones, driving up their unit costs. It gets no such advantage from insourcing compute bar a slightly lower TCO, which isn't going to be a huge deal to them anyway.
The product I would like is a photo album with an indexing and web interface components, and plugins to make sense of different phone platforms. Nannies love to text videos and getting those off the phone has been a pain; I end up saving the whole iOS backup and scraping any media looking files from it.
I have to imagine you're usage is an outlier here.
I doubt my usage is an outlier. But I suspect that I keep more video than most people just because I can.
At some point I might start thinking of re-encoding the originals, but so far storage is cheap to have locally, and I'm going to see how long I can keep this up.
I have a 2TB iCloud plan for my iPhone X. The phone is set to "Optimize Storage", so it will de-scale old "local" pictures once I hit ~256GB.
In the background, I also have the free and unlimited version of Google Photos running. It automatically uploads everything, including videos. Videos will be scaled to 16 MP / 1080p, but I'm not complaining since it's free.
I haven't hit 2TB yet, but so far it works. I also have a 20TB Synology NAS setup, but have little desire to run my own photo storage/hosting. The Photos app on my MacBook Pro also is set to download everything via iCloud Photo Library, so that's also backed up to the NAS via Time Machine.
Frequently there are proprietary things that aren't included in the library. For example, if you become dependent on Google Photos ability to recognize faces and objects, you tend to stop bothering to tag photos manually so when you export everything all you have is a big pile of unorganized photos.
Why would you want to increase risk of losing them all at once?
Speaking of cost, Apples war-chest is not small- if anyone can afford a premium, it'd be them.
In the beginning of 2017 Dropbox claimed a $1 Billion dollar run rate, however at the end of 2017 Dropbox had a net loss of $110 Million. When your entire year is a loss of $110 Million, saving $75 Million is very important to the companies survival.
Thanks!
[0] https://www.apple.com/business/docs/iOS_Security_Guide.pdf
Cloudkit and iCloudDrive use Account Keys, but it isn't clear if those are key encryption keys or data encryption keys. It also isn't clear if those are protected from information only from the client, or if the cloud is able to freely read them. The differences are massive in regards to privacy, and this document really doesn't have the needed technical information to make an informed decision.
Since Google is working to challenge AWS, it probably makes sense for them to strike deals with companies like Apple with even small profit margins if this increases their efficiency and allows them to then make more profit from other customers.
And then we also have the option that Apple simply can't build own data centers fast enough to accommodate all their needs. Encrypted storage blocks are a safe thing to distribute, so rather distribute those than some Siri voice recognition stuff.
Dropbox and Apple are completely different businesses with different business modules. If Dropbox suffers downtime, they lose revenue. If Apple suffers downtime, they can point at a cloud provider, while they keep selling their products.