A hardware subscription service for iPhones is currently in the works
Would you pay monthly for an iPhone?
It seems as though more companies are shifting to a subscription-based business model, where customers pay recurring fees monthly or annually for any services rendered. It focuses on retaining existing clients rather than garnering new ones.
Here’s more about this possible Apple subscription service, what it may entail, and when it’s expected to be available.
Apple’s potential subscription service for iPhones
Various media outlets have circulated rumors that Apple is developing a subscription service for its hardware. Additionally, it could be available before the end of 2022.
Mark Gurman from Bloomberg was the first to report this development. However, he could not identify his sources because Apple has yet to make official announcements regarding the subscription service.
Gurman reveals that this service would be Apple’s biggest push into automatically recurring sales, considering how iPhone purchases make up more than half of the company’s existing revenue, amounting to $129 billion last year.
Apple customers can currently pay for services like iCloud Storage or an Apple Music account. The iPhone subscription service would allow customers to subscribe to hardware with their Apple ID and payment methods.
There are no details regarding pricing, potentially bundled services, which hardware is included, or terms for trade-ins or upgrades.
Apple’s iPhone Upgrade Program vs. a new subscription service
Apple customers may wonder how this new subscription service works and how it would differ from the existing iPhone Upgrade Program.
The program is offered in the U.S., U.K., Canada, and China. Apple iPhone users can enroll and pay for a new iPhone with AppleCare+ over 24 months and can upgrade to the latest model after 12 months.
The price of the rumored subscription service is still unclear. According to Gurman, the main difference between the two models is that the monthly subscription price would depend on which device the user chooses. In contrast, the upgrade program is simply the device’s price split across 12 or 24 months.
The subscription service seems long overdue, considering how Apple releases new hardware between August and September every year. Apple customers will even wait months to buy a new iPhone in hopes that an even newer model will be available.
How Apple’s subscription program could drive more loyalty
There’s no set date associated with the release of this subscription service for iPhones. But it’s exciting for customers to think about enrolling in this service model.
It makes a lot of sense for Apple to make this significant shift — it would be a win-win for customers and the tech giant alike.
Consider how companies like Spotify, Wall Street Journal, New York Times, and Amazon Prime all offer student discounts for their services. Apple could follow the same trend, appealing to Gen Z customers who have a load of purchasing power.
This demographic held a whopping $143 billion of buying power in 2019 and it’s expected to increase from there. Apple’s subscription service could make the company appear more attractive to potential customers, driving loyalty and building trust.
Apple may take a financial hit if it switches to this model. That’s because the company generates so much of its revenue from the high upfront costs customers will pay for an iPhone. However, the subscription service is still a few months away and may even face delays.
Apple’s possible iPhone subscription service
Suppose Apple can work out the kinks of this subscription service. In that case, the tech giant will likely garner a slew of new customers, and the service may make up for lost revenue from the App Store.
Apple customers should anticipate this potential service but be wary that it may not come to fruition.
- iPhone apps can still track you regardless of what Apple claims
- iPhone 14: News, rumors, leaks, pricing, and release date
- iOS 16: News, rumors, leaks, and release date
- How to add your state ID or driver’s license to Apple Wallet