In the beginning, there was the Apple I and its progeny. Then came the indomitable Macintosh followed by iPod, iTunes, iPhone, the App Store, iPad, Apple Watch and everything in-between. Now, Apple is working on hatching a new golden goose.
Apple seems to have found a new golden opportunity. The company is working on a subscription service for the iPhone and other hardware products, a move that could make device ownership similar to paying a monthly app fee, Bloomberg reports, citing anonymous sources.
The service will enable users to subscribe to hardware, rather than just digital services… Such a service would be a real revolution at Apple, which has always sold its hardware products at cash prices or in installments via the partnership with Citizens One.
And almost certainly it would enable Apple to pull in consumers who consider its products too expensive and are reluctant to lay out large sums for a smartphone or a laptop.
The program would differ from an installment program in that the monthly charge wouldn’t be the price of the device split across 12 or 24 months. Rather, it would be a yet-to-be-determined monthly fee that depends on which device the user chooses.
The company has also discussed enabling users of the program to swap out their devices for new models when fresh hardware comes out.
MacDailyNews Take: A real hardware subscription service would be a game-changer for Apple, enabling the company to maintain high quality products – and margins – while attracting the price-sensitive user who has always longed for real Apple products, but settled for knockoffs of Macs, iPhones, iPads, Apple Watches, etc. from the innumerable followers of the world.
Of course, an iPhone – and/or iPad, Mac, etc. – subscription service would be an optional way to get the hardware, in addition to the usual product sales, outright and subsidized.
$99 per month gets you an iPhone and every Apple service. Presented like that, it’d be insanely irresistible. And every “new to iPhone” customer will immediately and irrevocably be steeped in Apple’s Hotel California ecosystem… We bet if Apple offered iPhones along with services bundled into one monthly fee – offer tick boxes for Apple TV+, Apple News+, Apple Arcade, Apple Music, iCloud Storage, etc. – they’d have a winning sales strategy (Apple Prime) on their hands! — MacDailyNews, September 11, 2019
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I’d end up paying $159/mo for the Pro Max and A1
What’s an A1, some form of Apple 1ntelligence?
Apple One – Not a great deal, unless you use ALL the bundled subscription services.
No, just no. Too many things have moved to a subscription model already. We’ve seen so many applications abandon the one time payment model where the user could budget in a one-time investment and then continue to reap the benefits over time, to now having to pay month-to-month to where, if they have a month where something doesn’t get used, they lose that value. Yes, hardware is expensive enough that it’s worth paying over time, but at least leave it where you can pay down principal and eventually be done paying (until you’re ready to upgrade, of course). Subscription model, just… no.
You’re in ti something. Property ownership is a hallmark that has propelled the economy. Abandoning ownership in favor of subscriptions is not a good thing in my opinion. Instead of paying companies monthly fees, we should be paying ourselves (i.e., saving) to make purchases.
Exactly. And even if we were to take advantage of a monthly installment plan, under the current model, we could still make extra payments to principal to pay down the cost of the item sooner. Under a subscription model, that’s not an option.
“You Will Own Nothing, And Be Happy About It”
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I am so sick of all manufactures wanting Monthly income…..JUST STOP already! Make a product, come up with a fair price…and that’s all there is to it! When HP started tracking my every printed page I was so mad I just quit their service period…I’ll buy all my Inks from Amazon…to hell with monthly service fees!!!!
Lisa, I started the monthly service fee, but you stopped paying long ago. Why is that?
To an extent I agree but you need to talk to wall street. They value recurring income above almost anything else. And public companies have a judiciary duty to their stockholders (i.e. their owners) to gather value in their stock. Regardless, you will still be able to buy hardware which is what will likely be best for most.
Let’s hope so. The option to purchase outright or at least on an installment plan, rather than a subscription, is what makes most sense to the consumer, so when given the choice, that’s the option they’ll go with. I suspect the subscription offering will be so unpopular that eventually it won’t be worth the while to offer it, and it will be discontinued (unless they decide to discontinue the other option instead, which will result in a public outcry).
Yeah, tell that to Adobe… They didn’t care that their subscription model to their software was unpopular. They knew they had most pro users over a barrel. And so it goes…
Offer both. Have they said they will discontinue the one time purchase yet?
Adobe did. Microsoft is trying. Now Apple is too. Monopoly power will do that.
Note to disbelievers: monopoly power doesn’t require 100% market share. It means capability to dictate prices far above a competitive market. For consumers, a duopoly market can be as costly as a monopoly. “Walled gardens” and “broad moats” explain why a hot dog and a soda in a stadium costs $$$. Tech companies are now using the same dominant power to force users to pay higher prices — or worse, track you and steal your info without disclosure.
Subscriptions are the oldest trick in the book to fool buyers to think they are getting a bargain as they pay many times what the good/service actually costs. Prices to Big Tech have fallen exponentially. It’s long past time to regulate them to create actual market competition.
Yeah, that’s the nastiness of it. One particular software product or application becomes the gold standard in its niche, and everyone wants to use that particular application (like Adobe Creative Suite or Microsoft Office), and then those companies say, “You want to stick with this product? You want to keep using it? Subscription’s your only option.” Then your only choices are to keep paying month to month whether you use it or not, or lose the option to use it at all.
And what’s worse, if everyone moves to subscription based pricing, then you’re left in the lurch if you’re looking for an option with a one-time fee. You can’t vote with your dollars if there isn’t a candidate who’s offering what you’re looking for.
You’ll own nothing, and be happy!
What if the golden goose was actually a golden goose. Imagine if the apple store sold pets.
The phones are getting so good that upgrade cycles keep getting longer. New features that drive sales are harder to develop; the last few upgrades have been mostly about the camera. We are reaching the point of diminishing returns
Agreed. I upgraded earlier models more frequently. This time, I just upgraded from iPhone 7 to iPhone 13. Some personal finance gurus advocate for getting a model behind the current model at a “discount.”
Subscriptions are like drugs. Once you start and let them put the needle in, you can’t stop.