Apple Inc. is developing a subscription-based service for the iPhone and other hardware products, a move that could make hardware ownership feel similar to paying a monthly app fee.
It has become increasingly evident that Apple has been focusing on recurring subscriptions like Apple Music, Apple TV Plus, Apple News Plus, Apple Fitness Plus, and Apple Arcade as key new revenue streams.
Apple has already bundled a number of these services into its Apple One bundles, CNet Reports.
For the first time, Apple would allow users to subscribe to the Apple iPhone and Apple Watch as well as digital services through this service — making it Apple’s biggest push into automatically recurring sales to date.
However, the project is still in the development phase, according to an Apple insider whose name was withheld because the initiative has not been announced.
There are other reasons why a program like this might be smart. Instead of selling iPhones, paying monthly would allow fans to upgrade to the latest model without swallowing high lump-sum prices for phones like the $699 iPhone 13 Mini or $1,099 Pro Max.
Boosting Sales of iPhones
Apple would likely see a healthy boost in revenues from the iPhone and digital services like iCloud and Apple TV Plus with a subscription-based iPhone service.
However, the concept raises many questions.
Apple may be simply looking to cut out the middleman and extend its installment-based payment system to other products. Customers can take out an interest-free loan with Citizens One, which they can repay over the course of 24 months.
Apple Card customers can also pay for Apple products in monthly installments without paying interest, but that option is available only to a small subset of Apple Card customers.
Apple could offer a subscription service, eliminating those requirements, and include other hardware products (such as the iPad and Mac computers) as well.