Apple Reportedly Launching iPhone Subscription Service
Apple is working on a new subscription service that will make device ownership like paying a monthly app fee akin to Netflix or Apple Music. The service —which will reportedly include the iPad as well —would be the tech giant's biggest push yet towards subscription services as a whole.
Apple is a hardware company, with iPhone sales making up the lion’s share of the company’s profits. As users opt to keep their phones for longer, the company has increasingly emphasized monthly reoccurring subscriptions like Apple Music, Apple TV Plus, and Apple Arcade.
Now, the company wants you to subscribe to hardware in the same way that you would traditionally subscribe to apps—at least according to a new report from Bloomberg.
With Apple's current iPhone upgrade, a user pays the cost of the device divided by 12 or 24 monthly payments. Payments are only required until a user has paid the outstanding balance of the device. With the new subscription model, a user will pay indefinitely. It's unclear how the company would handle upgrades.
According to the report, a subscriber will pay the yet-to-be-decided monthly fee to rent a device from the company. And, much like other subscriptions, a user would be able to cancel at any time. Presumably, a user who wants to end their subscription would have to return the device—but the project is still in development and details could change.
The tech giant has been working on the subscription program for months, but the project has been “put on the back burner” so the company can put more focus on a “buy now, pay later” service instead.
The move would make it easier for people to access Apple’s ecosystem and the company would benefit from more users purchasing apps through the company’s App Store, in which they receive a 30% cut of app purchases.
Apple—which is the largest company in the world—recently hit an impressive milestone. The company announced last month that they have 1.8 billion active devices worldwide. Getting those users to pay monthly could prove incredibly lucrative for the nearly $3 trillion company.
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