I don't think those two options are mutually exclusive and it can be both. It is a loss leader today meant to drive hardware sales, but they plan to jack up the rates as soon as the competition is sufficiently dominated.
This is why I really don't get all the Spotify/Pandora/etc haters out here on this forum. Do they really want to pay $24.99/month for streaming? Because that is what it's going to be if Apple gets a pseudo-monopoly on music streaming.
Honestly, I don't see a difference between that time in the 90s when Microsoft bundled Internet Explorer with Windows to drive Netscape out of business and today when Apple bundles Apple Music with iOS to drive Spotify out of business. Both seem qually bad.
Right but once AM is no longer a loss leader or perceived as inexpensive then it can't be a driver for hardware sales. Consumers look for alternatives similar to how they are now dropping cable in ever increasing numbers.