Apple needs to do one of the following things (in my opinion):
Buy Everpix and integrate that functionality right into iOS and the Mac. I love Everpix as standalone company, but a lot of people aren't ever go to hear about them unless it was functionality built right in by default. Also, photo stream needs to be reversed. Apple should store ALL photos/video taken with your iPhone and just store the most recent 1000 (or 30 days) locally on the device.
Make iCloud free for the total size of all the active devices backing up to that account. If I have a 16GB iPhone and a 32GB iPad, I should have 48GB available on iCloud for backups. If a device doesn't "check in" every 90 days, then that amount is removed from your quota. This would also be another reason to buy higher storage devices.
Make iCloud storage a terabyte for all users for free. This is almost the same as number two, but giving you so much that you'll likely not run out for a decade or so. Yahoo did it for Flickr, why can't Apple?Bradley Chambers
I disagree with Bradley. Apple and Yahoo ( and Google ) are in different business. Yahoo and Google make money from selling advertising. The end-user is the product. Google and Yahoo can offer seemingly free services in exchange for collecting and analyzing use information. The continuous advertising revenue generated by the user offsets the cost of providing those services. Apple, however, sells an actual product. The end-user is the customer. I only buy a new Apple device once in a while but Apple would have to give me service for the lifetime of that product. I have no MBA or large business experience but I just don't see how Apple would recoup the costs or running these services?