Apple is preparing an iPhone hardware subscription service that will revolutionize the buying process, allowing users to essentially lease their iPhone and get a brand new model every year.
Mark Gurman for Bloomberg News:
Apple’s rationale for doing this is very simple: making more money.
Right now, it’s only really diehard Apple fans that get new iPhones every year… The average iPhone user upgrades the device every three years. That’s actually a less frequent rate than about a decade ago, when carriers pushed subsidies and discounts every two years.
According to Counterpoint Research, the average iPhone sales price is about $825. That means Apple is generating a bit over $800 from the typical iPhone customer every three years.
That’s exactly why Apple is working on a subscription service. What if it could boost that $800 to north of $1,000 and get the old phone back to sell on the secondary market?
MacDailyNews Take: As we wrote last week, “Many Mac, iPhone, and iPad users would flock to this subscription services if Apple does indeed offer it – especially those who like to stay current on Apple’s latest and greatest devices. It would allow Apple to sell to most price-sensitive customers while generating even greater loyalty to the company’s products.”
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As long as it’s an option it would be great for those who like the idea. If it becomes the only way to get an iPhone then Apple will lose more money than they think they’ll gain by forcing the issue.
“Revolutionize the buying process….” for those that would likely be best to NOT go the rent path.
Though it’s a fine piece of tech, the “revolutionary process” is akin the credit card offers that flood college students (and I know it’s good for them/their parents).
Instead, it’s a revolutionary money making process, or employing generations old credit tool to enable many people to buy more than they should…or go into debt.
Of course, not all fit into the above mold, but many many do/will and it will be costly.
This may be tied into their codename “Breakout” first party payment system they’re working on.
So that Apple owns the phone, not you.
This is a very important point. It appears Apple wants people to become more dependent on its motherly protection. Everyone should know that the freedom that comes with owning hardware doesn’t exist when you rent. Given how few people read the fine print today, it’s obvious they’ll give up even more control and hidden fees when Apple lawyers draw up the rental contracts.
For one example: what happens to your data when you miss a monthly payment? If you owned the device, and backed up your files locally, all would be well. If you depend on Clouds, then all it would take would be one teeny tiny fine print item in the contract for the files you thought were safe to vaporize. In a related issue, Apple already has been criticized for making it damn near impossible for family members of a deceased iCloud user to recover files from Apple — and they owned the device outright.
I don’t trust Apple any more than any other rental purveyor to keep prices in check. Why would they? Subscriptions for hardware and software are sure signs that the company feels it no longer needs to keep innovating as they jack up prices. They think there is no competition and the sheeple will stay in the walled garden.
It’s getting harder to tell the difference between Apple, Microsoft, and Comcast.
Thank you for your reasoned response. If I differ at all, it’s that MS deserved to be broken up. They were that bad, but NEVER as bad as Apple with iOS. MS never censored what can run.
There could be an argument for censorship that Apple does force any browser maker to use Apple’s Webkit to render pages over the developer’s own rendering libraries. This is the reason at one time the only Chrome browser instance that was affected by the webkit attack was the iOS version. I suppose though, the good and bad of it is that any vulnerability on the IOS/Safari Webkit can be fixed within a single code library but will also affect every browser on iOS till it’s fixed.
There’s an argument over censorship that Apple can by fiat forbid any app.
Quite true. IMO Apple’s insistence of having App exclusion criteria beyond security and privacy is just begging the Courts to rule for 3rd party App Stores.
As a shareholder I really like this idea. Wall Street loves predictable subscription models vs the big annual iphone buying events. I’m sure you’ll still always be able to purchase a phone but my guess is fewer and fewer will want to do that over time.
Just the beginning of…
The Great Reset.
You won’t own anything.
You will be happy.
What I hope for (Saw this on twitter):
The Great Resist.
You won’t own us.
You will be unhappy.
Would love to EFF these rich a-holes who want to change our lifestyles to what they deem is correct and proper.
I’m more likely to benefit from this service by being a customer and OWNER of a certified refurbished iPhone (or MacBook) on the “secondary market,” at a significant discount.