Tuesday, November 29, 2022

Apple to sell iPhone for subscription fee: Report


Over the past few years, Apple has emphasised on recurring subscriptions such as Apple TV Plus, Apple Music, and Apple Arcade as new revenue streams.

Apple is working on selling iPhones and iPads as part of a hardware subscription service, Bloomberg reported. The service could arrive in 2023.

The move fits into Apple’s recent push towards subscription services. Over the past few years, Apple has emphasised on recurring subscriptions such as Apple TV Plus, Apple Music, Apple Fitness Plus, Apple News Plus, and Apple Arcade as new revenue streams. Many of those services have been bundled into the company’s Apple One bundles.

Apple has made a similar shift on hardware — it added a monthly subscription service for AppleCare extended warranties in 2019. Apple has also been offering the iPhone Upgrade Program — which allows customers to pay for AppleCare and an iPhone over 24 months and the option to trade in the device after 12 months — since 2015.

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According to Mark Gurman’s report in Bloomberg, the monthly charge would not be the device’s price divided over 12 or 24 months, but a still-undecided monthly charge, with the potential option of upgrading to new hardware as and when released. Like Apple’s other subscription services, it would also be tied to existing Apple ID accounts. It is also possible that AppleCare or Apple One services will be bundled.

At present, Apple charges a monthly fee for its services. Monthly charges for an iPhone are also available, but these are separate fees and plans.

It is unlikely that Apple will lend out devices for a monthly charge. It is possible that Apple is looking to cut out the middleman to expand its instalment-based offerings to other products.

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The iPhone Upgrade Program effectively enables customers to take out interest-free loans with Citizens One that they repay over 24 months. Apple also allows customers of Apple Card to pay for products through monthly instalments without interest. An Apple-based subscription service could eliminate thsse requirements and allow it to expand to other hardware products.

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