Firstly, apple doesn’t compete on price. Even if icloud is priced more than google people would always buy apple just for the ecosystem integration. It’s not even a competition to be honest.

Look up “buy or build” which is the industry term for this kind of evaluation: buy product and use it/resell it or build your own.

Apple has gone for different strategies in various areas:

Build own Apple silicon chips, do not buy off the shelf chips from intel or nvidia or amd.

Buy and resell google storage but don’t want to build their own distributed data store for end users.

It’s about what matters more for the company and the core products. Apple’s laptops, cell phones are considered core products. Icloud is a value add.

This is also why apple is making their own cell phone broadband chips. For most companies, this is a “buy from qualcolm” but apple needs to build their own for independence for their number 1 core product: the iphone.

> So in some sense if Apple is using gcp's for icloud then aren't they just reselling google storage themselves and google can always beat them in pricing while also wanting to chew away at the percentage of iphones themselves too?

Apple uses Samsung displays and Sony camera sensors, iirc, both of which are flagship Android phone makers. That doesn't really seem to be a concern in their procurement thinking. iCloud and Google Photos are not that direct competitors because which one is native depends on which phone you already bought. Google Photos definitely does have some market share on iOS due to having 3x the free storage and a handy compression mode (which used to be entirely unmetered at launch but now still uses storage, just less of it). But it will never be a full competitor because it is a separate app you have to install and it can't magically fetch cloud-only photos from the camera roll and photo picker UI like iCloud can.

The pricing of Google One and Apple One/iCloud+ isn't really dictated by underlying storage costs. At the higher tiers like 2TB, many don't come close to using all, while the laughable 5GB iCloud free tier clearly costs almost nothing in raw store, even on nVME SSD, if you compare it to S3/Backblaze or even raw disk pricing on the cloud.