Apple Developing Hardware Subscription Service for iPhones and Other Devices

[shplock]

People who don't have the funds to buy this device in the first place should not subscribe to that kind of services. There's no way the would be cheaper on the long run, and you can't resell the device afterwards

This does not need to be cheaper, it is about choice.
By your logic that means that 90% of people in life should never buy virtually nay new device/tech etc as they are buying something that is beyond them.
I personally see no issues at all as it is no different to subscribing to Spotify or Apple Music.
This is the way of the world now, subscribing and never owning anything, so we have no choice but to adapt and enjoy.

 

[zombierunner]

Probably cheaper to buy the phone and sell it after a year than leasing it for a year and having to return it.

 

[shplock]

In the early days they did look into being their own MVNO

I believe they should still go down this route as it make sense.

 

[webkit]

Don’t conflate financing with renting or a subscription. When you finance something for X years, you eventually own an asset worth Y dollars. When you rent or subscribe to something for X years, you eventually own no asset which of course has a value of $0.

While you may not own the asset at the end when you rent/lease, the lower payment can build cash savings. For example, if it costs $900/month to finance a car for 36 months or $400/month to lease same car for 36 months, you saved $18,000 ($500 x 36) leasing. $18,000 may or may not be equal to the car's eventual resale value but it's far from $0.

 

[ThisBougieLife]

So will it be like HBO Max where I can use the phone for a month, then cancel and send it back, then two months later re-subscribe and use the phone again for a couple months? ?

 

[huge_apple_fangirl]

Probably cheaper to buy the phone and sell it after a year than leasing it for a year and having to return it.

But then you get to keep those profits, not Apple.

 

[shplock]

Apple doesn't want to compete against the carriers because they sell a lot of phones via the carriers.

Unless Apple becomes their own carrier, which I would do as it makes sense in so many ways.
Take for example when Apple launched visual voicemail but then so many carriers had a temper tantrum strop and refused to let it work.
if Apple had their own carrier then they could develop so many cool features that would work with the iPhone!
There are so many amazing ideas that would be brilliant for an Apple carrier, sadly though Tim Cook will never do this as he is useless at new products and also allergic to spending severe amounts of money.

 

[vartanarsen]

These phones that will be distributed under this no doubt will be replacement models, not fresh sealed units

 

[PressureDrop]

While you may not own the asset at the end when you rent/lease, the lower payment can build cash savings. For example, if it costs $900/month to finance a car for 36 months or $400/month to lease same car for 36 months, you saved $18,000 ($500 x 36) leasing. $18,000 may or may not be equal to the car's eventual resale value but it's far from $0.

I`m unsure about your statement, because in my opinion people who can`t afford $900/month to finance a car, but $400/month to lease it do not save $500. And I think that this is the target audience…

 

[webkit]

Subscription, lease; call it what you will, but this will never be the economical way to own a device. It's brilliant on the part of Apple because they sell more product. This is directly taken from the automotive industry. I know people will not see the disadvantages and they'll be paying too much.

Assuming it does work similar to leasing and Apple uses its trade-in values to determine residual, the cost of the subscription may not be much worse than buying a phone and then trading back to Apple after 12 or 24 months.

If we assume an iPhone is worth 50% of its original retail price after one year and 42% after two years and Apple charges no fees or interest, a 128GB iPhone 13 would be around $34.50/month on a 12 month plan or $20/month on a 24 month plan. However, I'm guessing Apple will require AppleCare+ as part of the program which would add to the cost.

 

[npmacuser5]

The elephant in the room, wireless providers. The big deal for them, locking into their network. I would be interested if this iPhone idea was an add on to their current subscription bundle for software. Every piece of the bundle takes a discount including the iPhone. No attachment to any carrier. Interesting to see!

 

[Edsel]

Life has become a Subscription.

 

[Motionblurrr]

Lol and yet again, the people who hold on to their iPhones for 3-4 years are the winners

 

[mikethemartian]

Volvo has had car "subscriptions" for a year or two now.

Volvo Car USA | Luxury SUVs, Sedans, and Wagons | Official Volvo Website

Welcome to Volvo Car USA. Explore our range of new and pre-owned luxury vehicles. Discover our fully electric, plug-in hybrid, and gas (mild hybrid) cars. Build your new car today.

www.volvocars.com

I think Ford was doing that as well.

 

[shplock]

It occurred to me a few days ago that Apple could presumably offer some kind of recurring upgrade program for its Mac, iPad, or even wearable devices, similar to what‘s currently offered for iPhone.

I thought of it after realizing that the broader Apple Silicon transition makes it much easier for Apple to plan around consistent timing for future releases. Will it happen? I don’t know…people don’t upgrade their laptops, desktops, or iPads as often as they upgrade their phones, but Apple clearly is moving toward more of a subscription or service model around their growing ecosystem. I’m sure it would make sense for a lot of power users who want the latest devices.

From a business perspective it makes so much sense, especially for non iPhone items such as macs etc.
Take the mac for instance such as a MacBook. You are correct that people tend usually to buy a new one every 4 or 5 years I would imagine.
So if Apple were to set the subscription rate just right then that could mean that they would make more money by the time those 4 or 5 years have passed than the cost of buying the Macbook outright.
This would mean more profit.
The customer would get a good deal as they could buy a Macbook (or other item) without having to fork out a small fortune first. Yes they would pay more over time but if you do not have £2500/$3000+ cash on hip to spend on a MacBook etc then I would argue you would not care.
This is how interest rates work on a credit agreement work, it basically does penalise those who are poorer but that sadly is the system of capitalism we are stuck with.
I personally would not mind as long as the price is right and there are the perks such as maybe free Apple one subscription thrown in etc.

 

[shplock]

I wouldn't do this for a computer or even iPad, which I tend to keep for several years, but I'm already doing this with the iPhone upgrade program, and I think it's well worth it. I pay $55 a month and I get a new phone every year. I also don't have a drawer full of old iPhones like i used to, and I never have to decide if the newest iphone is worth upgrading to. I'd be interested to see what the pricing would be like compared to the current upgrade program, which isn't paid through Apple.

I hear what you are saying but with respect not everyone is as financially able as you are and so do not have $3000+ etc cash on hip to buy a new computer etc with the they want.
This is basically going to penalise those who can not afford to buy new devices outright but that is the way that credit has worked for decades, so hate the system not the player.

 

[DanTheMan827]

I thought it was.

It may not be liked, but among professionals, it’s just part of doing business.

Well here's the thing, I don't want to pay monthly for Adobe Lightroom, I want to buy the current version for $200 or whatever and be able to use it until it no longer runs due to some OS incompatibility.

I did that with Lightroom 6, and I still use it...

I paid $129... if I would've subscribed to Creative Cloud, I would've paid at least $830 by now.

That's why people hate subscriptions for software.

I can't install it directly on the new version of macOS because the installer isn't 64-bit, but it will still run if it was installed prior to upgrading...

 

[mikethemartian]

you'll own nothing and you'll be happy

 

[npmacuser5]

Lol and yet again, the people who hold on to their iPhones for 3-4 years are the winners

Five years at least!??

 

[DanTheMan827]

Subscriptions are a lot cheaper each month because you will never get ownership of the device.

This is different in that it targets the low-end market who don't even have the means to finance an iPhone.

Think of it as dollar store vs. Costco strategy.

It's not cheaper, you just pay less in return for not having to sell your device at the end of life.

Instead, they take your device back and sell it themselves (for probably more than they "pay" you)

 

[shplock]

yea no thanks, I prefer to be an owner instead of a renter

THat's fine as this is not targeted at rich people like you anyway.

 

[mikethemartian]

In the early days they did look into being their own MVNO

Probably a very regulated industry.

 

[shplock]

But what about all of the electronic garbage?!

This is why Apple recycle more and more of their devices.

 

[DanTheMan827]

This is what my father called 'on the never, never'. You never stop paying and you never own it. This is how we got our first TV back around '59. We had the same set for years and only stopped when he worked out that he'd bought it three times over with the rental payments.
That was a lesson that is still with me to this day. Apple can go take a hike if this becomes the only way to obtain their products.

This also applies to things like internet modems and routers if they aren't included in the cost of the service.

 

[webkit]

I`m unsure about your statement, because in my opinion people who can`t afford $900/month to finance a car, but $400/month to lease it do not save $500. And I think that this is the target audience…

The lessee would pay $500/month less compared to someone financing same car for same term. A big reason why someone financing a car builds equity over the term (e.g., 36 months) is because they've been paying significantly more per month ($900 versus $400 in my example) than a lessee. It's not like the lessee has $0 at the end of the term, they have the $500 less paid per month or $18,000 less paid over the 36 months compared to the person who financed. Another way to look at it is the person financing would've paid $18,000 more for the same car in order to be able to build that equity.