Apple is reported to be working on a plan that would make owing its hardware such as the iPhone or the iPad akin to subscribing to any of its software services. This, experts believe, would be a masterstroke on part of the Cupertino based company as the scheme could significantly add to Apple’s revenue from the sale of its devices. As it is, the iPhone already happens to be the biggest grosser for the company and contributes to almost half of the company’s revenues.
The subscription service where buyers will be required to pay a monthly fee instead of making an outright payment would mark a huge shift in the company’s sales strategy adopted so far. The same is also going to be different from the usual installment program where the device cost is divided and paid over a period of 12 or 24 months. Instead, they would be paying a fee which however is yet to be worked out but will likely depend on the particular device and model being selected.
Buyers would be required to subscribe to the Apple devices using the Apple ID and App Store account as they do for subscribing to any of Apple services. While details are still scarce, it is likely the above plan will make it easy for subscribers to switch to the latest devices than the exchange program the company currently supports. This will ensure higher adoption of the latest model while the older models could be dished out for a lower fee.
As Bloomberg stated, the company has been working on the hardware subscription plans for a few months now before siding it to introduce a ‘buy now pay later’ service which the company hoped will be able to offer more quickly. That said, the subscription plan is expected to be ready by end-2022 or early 2023 itself. Apple had earlier launched its Apple One bundles as well as the AppleCare technical support plans in 2020. The Apple One bundle offers all of Apple’s services and includes TV+, Arcade, Music, Fitness+ and iCloud storage.
As of now, Apple offers devices either for outright purchase or for an installment plan. Some of the devices such as the iPhone or the iPad are also backed by carrier discounts while there are discounts offered at different times of the year by the retailers. The subscription plan would make for a huge shift from the above marketing strategies, besides having the potential to add substantially to its revenues in the future.
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