Apple is reportedly working on a new subscription service through which it will sell the iPhone and other hardware products in what could be the company’s biggest push in subscription-driven sales. Simply, Apple would sell its iPhone and iPad as a part of a subscription where customers will pay a monthly app fee to own their device instead of buying them through the conventional method. Bloomberg has reported that Apple’s hardware subscription service is still in development, but chances are that Apple will launch it as early as later this year.
For Apple, subscriptions have been extremely important. They contribute heavily to Apple’s overall revenue. But so far, subscriptions have been available on Apple’s software services, such as Apple Music, iCloud, Apple TV Plus, Apple Fitness Plus, and Apple Arcade. Apple also offers the Apple One bundle that comprises subscriptions of some of its software services into a single subscription for a monthly fee. Selling hardware products through subscriptions is expected to be Apple’s biggest push into subscription services as a whole. And just like its software services, the iPhone is likely to be tied to the Apple One subscription bundle.
According to Bloomberg, however, the monthly fee for hardware subscriptions would not be the equivalent of instalments where you pay, say, the iPhone’s full price in 12 or 24 months. The subscription for the iPhone, instead, would involve the option to upgrade to new hardware as it is released for an amount that is not clear yet. In other words, Apple would charge you a fee that will include a part of the cost of the iPhone as well as a fee that would let you upgrade to a new iPhone next year without having to pay the full amount. Apple could also bundle its software services into the iPhone subscription. This is what the report said could be the nature of the subscription, but nothing is officially confirmed.
The iPhone-based subscription service is likely to be tied to a user’s Apple ID account, just like other subscriptions. That could possibly also include AppleCare or Apple One services just so the user would not have to pay for them separately.
Apple currently allows customers in select markets to finance the purchase of hardware products through an Apple Card. There is also the iPhone Upgrade Program through which customers, again, in select countries, can get a new iPhone every year without having to pay any additional costs. It also has subscriptions for AppleCare extended warranties. These might as well be considered hardware subscriptions, but Apple’s new subscription would not just simply be an EMI option.
It is hard to imagine Apple working on a service that would essentially replace these existing programmes. But because the specifics are not clear, we could assume that Apple is possibly thinking of giving customers the flexibility to own an iPhone alongside its popular software services without having to pay for them individually. Of course, the subscription fee for the entire bundle could be higher than what Apple charges for Apple One currently.