Not everything Apple touches turns to gold, a case in point is the .mac service which has recently been rebranded with not terribly clever moniker: MobileMe. What Apple fails to understand from the get-go is that people expect their cloud services to be free or at least extremely cheap and $99 per year (you can't fool people by not making it an even hundred, by the way) is simply too much to charge.
If you look at most cloud services, they are free. Google offers almost all its consumers services free of charge in exchange for viewing text ads--no such thing as a free lunch--but most people are willing to make that trade-off. As a consumer, let's say I own a Mac Book Pro and an iPhone, a scenario that will likely be true when I buy an iPhone next month. I would think that for what I have paid for these devices, Apple would be give me syncing services out of the box for free as a service for being a loyal customer. It should go without saying, but instead, Apple wants to bleed its loyal clientèle for a few more (meaningless) dollars.
To Apple's credit, they have increased the amount of online disk storage substantially to 20 GB from the meaningless couple of gigs they offered with .mac, but a better approach than charging for 20 GB might be a tiered service structure starting with a free set of basic services including syncing and 5GB of disk space, then increasing in modest incremental charges for 10 GB, 25 GB, 50 GB and 100 GB of online storage. This would make more sense to me than charging for the base set of services from the start.
This is actually the approach that Adobe is taking with its recently launched Acrobat.com. You get some basic services for free including a free word processor (the recently purchased BuzzWord), five free pdf conversions, Adobe Connect Now meeting services for up to three people and 5GB of storage space. They only begin charging when you surpass any of these thresholds. Apple could learn from this model.
Interestingly enough, open source is already rushing to fill the need for free services. One such company, according to this TechCrunch article, is Funambol, a company that has used the Apple iPhone development platform to create a free service that does just about everything the MobileMe syncing services do without the price tag. The article reports it doesn't synch files and photos, two fairly large missing pieces, but since it's open source, chances are some resourceful people somewhere will put this together and MobileMe syncing will become a meaningless service nobody but the grossly uniformed purchase, or Apple may be forced to change to a tiered pricing model similar to the one I described earlier.
Apple should know its biggest asset is its customers' loyalty. It should be rewarding that loyalty, not trying to gouge a few more dollars from them. That just doesn't make good business sense and I don't need to spend a $100 a year for the convenience of auto-syncing when there are similar free services popping up all over the place.