Tuesday, May 17, 2022

Apple will reportedly sell the iPhone as a subscription service

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Apple is reportedly working on selling iPhones and iPads itself as part of a hardware subscription service, according to a new report from Bloombergwhose author Mark Gurman writes that the service could arrive next year.

The move would fit in with Apple’s continued pursuit of subscription services as a whole. In recent years, Apple has increasingly emphasized recurring subscriptions such as Apple Music, Apple TV Plus, Apple News Plus, Apple Fitness Plus, and Apple Arcade as major new revenue streams for the company. Many of those services are already bundled in the company’s Apple One bundles as well.

We’ve already seen a similar shift in hardware: Apple added a monthly subscription model in 2019 for its extended AppleCare warranties. iPhone Upgrade Program — which allows customers to pay for the combined cost of AppleCare and an iPhone for 24 months and the option to exchange their device after 12 months of payment — since 2015† Both programs already resemble a hardware subscription in many ways.

BloombergThe report doesn’t clarify how a subscription program would be materially different from those existing services, but it’s easy to imagine Apple building on something like the iPhone upgrade program installment model by offering customers other Apple services (or a full Apple One subscription). ) for a single monthly fee. Right now, you can pay Apple monthly for its services, and you can pay monthly for an iPhone — but they’re still separate fees and plans to manage.

It’s hard to imagine Apple just lending out devices on a monthly basis – can you really just pay to “subscribe” an iPhone for a single month, like you can for Apple TV Plus for a season? Ted Lasso† Likewise, a world where Apple makes customers spend months investing capital in a device only to return it at the end of the process seems equally unlikely.

It’s possible that Apple just wants to cut out the middleman and expand its installment payment offering to other products. The iPhone upgrade program allows customers to take out an interest-free loan from Citizens One, which they then repay over the course of the 24-month plan. Apple also allows Apple Card customers to pay for Apple products in monthly installments without paying interest, but that too is limited to a small subset of Apple customers. An Apple-based subscription service could eliminate those requirements and allow Apple to extend it to other hardware products as well (like the iPad or its Mac computers).

But while the details are still small, one thing is clear: Apple’s subscription ambitions are just getting started.

To develop…

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