As we enter what experts predict will be an extremely challenging year for many of us financially, Apple is allegedly trying to help via the launch of a subscription service for its iPhones, iPads and other hardware products.
According to a fresh report published by Bloomberg (opens in new tab), the development could make Apple device ownership similar to paying a monthly app fee – although the publication's anonymous sources say that the project is still in development.
The service would allow users to subscribe to (and effectively auto-lease) Apple's hardware for the first time, rather than just its digital services. Yes, Apple has offered instalment plans in the past to spread the cost of paying for its devices, but not using a subscription model tied into your Apple account.
Adopting a hardware subscription scheme would mark a major strategy shift for a company that has generally sold devices outright and at full cost, albeit occasionally using instalment models or with carrier subsidies. Crucially, this idea would differ from an instalment programme because the monthly charge would not be the price of the device split across 12 or 24 months. Rather, Apple could keep you locked in for longer, because the cost of your monthly subscription would be a yet-to-be determined fee dependent upon on the next device you choose.
The report continues that the Cupertino giant has discussed allowing its iPhone or iPad lease customers (or iLeasers, as they probably will not be called) to swap out their devices for newer models as and when fresh hardware comes out.
Apple typically releases new versions of its major devices annually: the iPhone 13 Pro Max is currently the pinnacle of Apple's smartphone offering, but we're expecting the iPhone 14 in September, and while the iPad Air recently arrived in its fifth iteration, the iPad Mini 6 launched in 2021 and the original iPad is into its ninth update.
The iPhone is currently Apple’s biggest seller, generating nearly $192 billion last year, which is more than 52 per cent of the company’s revenue. Meanwhile, Apple's iPad offering accounted for just 8.7 per cent of Apple's sales last year, while services (which include Apple Music and iCloud subscriptions) made up 18.7 per cent of Apple's revenue.
For Apple, the benefit of the subscription scheme is surely to make the process of buying an iPhone or iPad akin to paying for your iCloud storage or an Apple Music subscription each month – and thus much easier to stomach. According to the report, Apple is planning to make the process just as simple too, by letting customers subscribe to hardware with the same Apple ID and App Store account they currently use.
Bloomberg's report claims that the company has already had preliminary internal discussions about adding a hardware subscription to its Apple One bundles and AppleCare technical support plans too. (Apple launched these bundles in 2020 to let users subscribe to several services, including TV+, Arcade, Music, Fitness+ and iCloud storage, for a lower monthly fee.)
The report adds that Apple has been working on the subscription scheme for several months, but that the project was recently put to one side in an effort to speed up the launch of a “buy now, pay later” service.
So when can we expect it? Bloomberg's sources say Apple's subscription service is still expected to launch at the end of 2022, "although it could be delayed into 2023 – or end up getting cancelled".
As we know more, so shall you...
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