We've been hearing some news about a rumored iPhone subscription service, that'd let you pay monthly for access to the latest Apple hardware like the iPhone 13. Initially, we were skeptical, but we've just heard that the price might be quite tempting.
This comes from Apple-leak maestro Mark Gurman – in his Power On email newsletter, he discusses his expected pricing for the iPhone subscription service, depending on the model of iPhone. The figures he chose “undercut the pricing of the old iPhone Upgrade Program by a few dollars,” suggesting that Apple will do the same for its service.
Apple's iPhone Upgrade Program is a service that lets you stagger the cost of a new iPhone over a set period of time, rather than paying for it upfront. You don't save any money this way, but paying monthly can lighten the financial burden for most people.
Gurman's math is largely focused on Apple's finances, pointing out that the audience retention over the typical upgrade cycle (and the sale of subscribers' old iPhones) would create even more green for Apple. But he also posits that Apple's prices could go even lower than the ones he suggests.
“The company could make additional money if the program is tied to its high-margin Apple One digital services bundles and AppleCare” Gurman also suggests. This basically means you could also get things like Apple TV Plus, Arcade, Fitness Plus, News, and a select bundle of other Apple subscription services as part of the package. These might bump the price up though.
Given that Apple hasn't even commented on the plans for such a subscription service, we can't take anything for granted, but Gurman is a good source for Apple goings-on and his report suggests that the iPhone subscription service won't be as expensive as we expected.
Analysis: Apple doubling down on its strategy
One of the key reasons people buy Apple hardware is because of the ecosystem: its tablets, smartphones, wearables, computers and other gadgets all play well together. If you, for example, swap your iPhone for an Android device, or your tablet for an Amazon Fire slate, or your wearable for a Fitbit, you've suddenly got a weak link. So you don't.
Apple is likely banking on this fact with its iPhone subscription service, especially if it opts for the ‘financing' model where you pay off your new iPhone over time, like you would a car. Since you're paying regularly, you've got more motive to stick to your iPhone, and won't suddenly decide to move over to Android when a flashy new Samsung phone comes out.
That'll be doubly the case if Apple Care is included as part of the package – it'd stop ‘breaking your phone' from being a good excuse for getting a new smartphone.
And it'll be triply the case if Apple One is added – you're not going to give up on your subscription service if you're halfway through Foundation when time comes to renew.
So while Apple's iPhone subscription service is only a rumor at this point, we'd be very surprised if it didn't come to pass, as it would be Apple's next step in ensuring its customers stick to iDevices – especially if Gurman's prediction, of it meaning ‘big bank' for Apple, is correct.
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