An iPhone hardware subscription service tied to the Apple One subscription services bundle is thought to arrive before the end of 2022.
- What’s happening? You may not need to sell your kidney to get an iPhone 14 as Apple could launch an iPhone hardware subscription before the end of 2022.
- Why care? Because people who can’t afford regular upgrades will have a chance to lease the latest Apple smartphone and upgrade to a new one every year.
- What to do? Think about this idea for a moment. We used to think people wanted to own digital items like music, but subscriptions proved us wrong. Therefore, the subscription model could lend itself perfectly to computer hardware.
An iPhone hardware subscription is coming
It’s happening, your next iPhone could be a subscription. Instead of paying it in full, you would be basically leasing the device and getting a new model annually.
Mark Gurman, writing in his Power On newsletter on Bloomberg, alleges that Apple is now readying an iPhone hardware subscription program that would let people use their shiny new handset by paying a monthly subscription. The offering is understood to be tied to Apple’s bundle of digital services, dubbed Apple One.
It should launch before the end of 2022.
Show me the math
Gurman did some interesting back-of-the-envelope math proving how such an offering could boost Apple’s iPhone revenue significantly:
I’ll use the starting prices for the iPhone 13, Pro and Pro Max—$799, $999 and $1,099—and pick monthly price points of $35, $45 and $50 as examples. I chose these levels because they undercut the pricing of the old iPhone Upgrade Program by a few dollars.
Here’s how much Apple would generate over three years from the monthly subscription compared with the upfront price:
- iPhone 13 ($35/month): $1,260 over three years instead of $799
- iPhone 13 Pro ($45/month): $1,620 instead of $999
- iPhone 13 Pro Max ($50/month): $1,800 instead of $1,099
As you can see for yourself, an iPhone subscription would make it a lot easier for cash-strapped buyers to get the latest Apple smartphone every year whilst generating significantly more money per consumer for Apple.
An Apple hardware subscription is inevitable
Research firm Loop Ventures was the first to float the idea of Apple hardware subscriptions. It’s hard to argue with the way that consumers are changing their buying habits, especially when it comes to subscription services. They are all over the place. And Apple isn’t a stranger to these things, either.
To get there, however, Apple is believed to build upon the elements it already offers. Loup Ventures analysts back in 2020 speculated that that might include the iPhone Upgrade Program, the AppleCare extended coverage and the company’s subscription bundle, dubbed Apple One. Read: How to subscribe to Apple One
And if an iPhone hardware subscription is in the works, subscriptions for iPad, Macs and other products might follow in the future. Eventually, Apple could merge those services offerings and hardware subscriptions into one mega-bundle covering most of your tech needs in exchange for a monthly fee.