I think it's part of an onboarding strategy, because remember that the next tier is $1/mo., or $12 a year. Peanuts. It could easily be rolled into the purchase price of the device for a year or two. Apple TV+ which come with a year free with purchasing an iPhone would be $60 a year, or 5 years of iCloud 50GB.

However, by charging peanuts, you got the user into a subscription, which is the important bit. A person in a subscription who jumped the hurdle of not paying vs paying a little is much more likely to upgrade later.

It also plays into a Steve Jobs strategy, for better or worse. Many people don't hear about this, but Steve Jobs had a view that people don't value things that are free. He made the Cafe at Apple HQ subsidized but require payment, not that Apple couldn't afford it, but because he knew people wouldn't respect free food. This view of Apple's, that people don't value things they didn't pay for, seems to permeate many of their business decisions.