Apple might want you to subscribe to your next iPhone

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What if instead of buying your next iPhone or even spreading payments for the nearly $1,000 device over several months, you leased it like you would a car?

Bloomberg reports this week that the Cupertino tech giant is exploring the possibility of launching another subscription service in addition to iCloud, Apple Music, Apple TV+ and Fitness+. But instead of accessing digital services and online programs from video conferencing gurus, you’d be paying subscription fees for iPhones and iPads (and perhaps other Apple hardware).

The details in the report are sparse. The rumor service is said to charge a monthly fee for access to hardware. The benefit, as with leasing, is that one can get an iPhone 13 Pro Max (worth $1,099 / £1,049 / AU$1,849) with no money but the agreement to pay a monthly recurring fee for as long as they have the phone.

It’s not clear if the program would work exactly the same as leasing and if you can turn the phone in at the end of the lease to start a new one with a replacement or upgraded phone, buy the phone from Apple at the value that the company grants it, or walk away without a phone and the sunk cost of the subscription.

While this may be a smart way for someone to quickly access a powerful new iPhone or iPad (and maybe a MacBook or Mac Studio), it could also be a clear win for Apple.

A bigger company

The company already has a thriving subscription business that earns billions each quarter and has grown into a significant portion of its total revenue (iPhone sales still generate the most revenue).

Apple already has a monthly installment plan for iPhone called The iPhone Upgrade Plan, which for $35.33 (and up) per month ensures you own the latest, greatest iPhone every year. You cannot get a new phone until you have made 12 monthly payments. A subscription program may offer more flexibility, but it would also likely mean that you would never own the iPhone.

If nothing else, launching such a hardware subscription company would align the hardware with the wide range of subscription services Apple already offers. It’s also clear that Apple is eager to consolidate things as it did in 2020 when it unveiled the Apple One, which, at the top tier ($29.95 / £29.95 / AU$39.95), Apple Music, Apple TV+, Arcade, News, Fitness+ and 2TB offers from iCloud storage.

A win win?

Some industry watchers see this potential service as a boon to Apple and consumers. “This is a more convenient way to provide hardware and services and [Apple] could open it up to include other Apple hardware devices in a Chinese menu format,” lead analyst and Creative Strategies chairman Tim Bajarin told us via email, adding, “It would also commit their customers to a long-term service model that is more predictable. “

Such a subscription model could also alleviate the stress consumers feel as their shiny new and expensive iPhones quickly turn into the slower and distinctly less valuable devices of last year. The problem of rapid amortization can fall into Apple’s lap with a subscription model.

You already use all these services on Apple hardware. The question is, would you pay for an Apple One Premium Plus (we guess at a name, here) plan that includes your choice of a leased iPhone, iPad, and (perhaps) AirPods, Apple TV box, and MacBook or Mac? And what would you pay each month for such a service?

Apple has not commented on the Bloomberg report. Apple also declined to comment on Ditching on the matter.

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