Apple in Talks With Goldman Sachs Over Potential iPhone Buyer Finance Options

[JonKelley]

Apple has learned from the auto sales industry when you change the conversation to monthly payments instead of the total price, many consumers don’t seem care about the high price. Then, once the $1000 phone becomes an $1199 phone, Cook can say it’s only a few premium coffees a week more again. From a business standpoint I get it, but as a paid-in-full type of customer that tactic doesn’t work for me. I hope customers keep holding onto their phones longer in response.

 

[dominiongamma]

If you need a loan to buy a $1000 phone, you shouldn’t be buying that phone.

Same logic with a car or a house? Just because you don’t have the money upfront doesn’t meant you can’t afford it.

 

[NachoGrande]

Insanity.
[doublepost=1518008208][/doublepost]

Same logic with a car or a house? Just because you don’t have the money upfront doesn’t meant you can’t afford it.

A house is a deduction and an asset. We're talking about 1,000 dollars not 40k or 500k for a house

 

[69Mustang]

.

Same logic with a car or a house? Just because you don’t have the money upfront doesn’t meant you can’t afford it.

It's not the same logic with a car or house. Financing a place to live or a vehicle to get from A to B is not on par with financing commodity electronics. That's an absurd comparison.

 

[Dave245]

You're correct, I just don't like having debt personally. Especially with tech products, I would rather just pay it off and have the advantage of owning it without carrier restrictions, monthly payments, etc.

That's exactly the same as myself, the iPhone X i brought outright and to me it seems like there won't be any major updates this year so i may just hang on to it until next year. I hate debt and was always brought up under the adage that if you couldn't afford something you don't buy it until you can.

 

[Chupa Chupa]

I can understand financing An $1,100.00 iPhone through your carrier, because that is a lot of money for someone to pay in full up front. But even if you could, why would you finance an Apple Watch? I just feel like this is a way for someone to make an excuse to get themselves in debt that they don't need (Which adds to other monthly bills someone has). If Someone has the necessary funds, I would just pay it off and not finance. But I do understand its more 'comfortable' to make monthly payments, even though it's not always the most logical method just because it's an option to do so.

Sure, but why would anyone finance a loaf of bread that will be consumed by week's end? Few people pay their credit card debt in full at the end of the month. Suddenly that $3 loaf of bread is a $5. I had friends in college -- otherwise smart people -- that would spend college loan money on booze. Talk about pissing your money away. Also no one NEEDS an AW, like they need food, so no matter how one pays for it, they buyer had to justify the frivolous purchase in his or her head. $175+ buys a lot of bread.

Apple already has finance options for the iPhone. It would make better business sense to me if via Goldman they issued their own store card vs the current financing scheme so consumers didn't have to fill out paperwork every time they upgraded a phone. It would also better open up sales of other stuff at Apple Stores as well as services.

Whether it's a smart move for an individual consumer to go this route depends on the offer and situation and discipline of the consumer.

 

[Kiro]

Apple has learned from the auto sales industry when you change the conversation to monthly payments instead of the total price, many consumers don’t seem care about the high price. Then, once the $1000 phone becomes an $1199 phone, Cook can say it’s only a few premium coffees a week more again. From a business standpoint I get the it, but as a paid-in-full type of customer that tactic doesn’t work for me. I hope customers keep holding onto their phones longer in response.

Maybe they learned it from the auto sales industry for selling automobiles ?
I guess most people won't be able to afford an apple car.
Which will probably be much more expensive than the usual car.

 

[DEMinSoCAL]

.

It's not the same logic with a car or house. Financing a place to live or a vehicle to get from A to B is not on par with financing commodity electronics. That's an absurd comparison.

Except the post from radiology is the one that should be scrutinized. To him, it sounds like $1000 is pocket change. To many people in this country, the ability to purchase a $1000 phone outright is about as plausible as them buying a house or car outright. Some would say a mobile phone is not a commodity any longer, but more of a necessity. If you can get an interest-free loan to purchase a phone, why not? It 's basically free money, and gives them the convenience of paying over time at a rate they can afford. As a matter of fact, I will typically use someone else's money when it's free over a period of time to pay off something as it allows me to keep more of mine!

 

[foxcub6]

I can understand financing An $1,100.00 iPhone through your carrier, because that is a lot of money for someone to pay in full up front. But even if you could, why would you finance an Apple Watch? I just feel like this is a way for someone to make an excuse to get themselves in debt that they don't need (Which adds to other monthly bills someone has). If Someone has the necessary funds, I would just pay it off and not finance. But I do understand its more 'comfortable' to make monthly payments, even though it's not always the most logical method just because it's an option to do so.

Lol not everybody has a spare £1k Kicking about that’s why finance is there most folk will take it out even if it’s just a watch you clearly don’t live in a normal working mans world where money is maybe not tight but pse don’t brag of your financial position obviously if everyone could pay cash tbe would
[doublepost=1518010584][/doublepost]

Most definitely this. If financing a watch or iPad is necessary then maybe those items really aren't needed. They're just "wants". If the loans aren't paid off in time, the interest rates on those loans can end up being predatory... up to 28% interest. Apple is a business and their job is to make money. I get that. It just seems... unseemly.

So what your saying only rich folk should have the privilege of owning a watch or a iPhone , your ignorance of the ( I think you see yourself as a upper class ) working class is out of date my friend come off your high pedestal and don’t be so bloody ignorant

 

[sirozha]

now we need to visit an iBank (pun intended) to finance our iPhone purchases?!

What pun?
[doublepost=1518011461][/doublepost]

I can understand financing An $1,100.00 iPhone through your carrier, because that is a lot of money for someone to pay in full up front. But even if you could, why would you finance an Apple Watch? I just feel like this is a way for someone to make an excuse to get themselves in debt that they don't need (Which adds to other monthly bills someone has). If Someone has the necessary funds, I would just pay it off and not finance. But I do understand its more 'comfortable' to make monthly payments, even though it's not always the most logical method just because it's an option to do so.

Apple is pushing luxury items to the masses. As an AAPL shareholder I love it because masses are a$$es. As a human being I’m appalled at what this planet is turning into.
[doublepost=1518011685][/doublepost]

Maybe they learned it from the auto sales industry for selling automobiles ?
I guess most people won't be able to afford an apple car.
Which will probably be much more expensive than the usual car.

There will not be an Apple car. Apple is too late to that game. The only way to have the Apple car is to buy Tesla. Musk doesn’t have money to build enough Teslas, and he is interested much more in space exploration than in electric cars. Pay him generously and buy Tesla, Tim. You are missing out on a huge opportunity.

 

[8012R3]

Apple can try to justify the iPhone X “as costing the same as ‘just a few’ artisan coffee’s per week...”

Or I can justify not buying one by saying... “the cost of an 256GB iPhone X could pay my mortgage for three months.”

I’d rather pay off the mortgage. Or even - I don’t upgrade my TV, cooker, gas boiler, carpet, furniture on an annual basis so why my mobile phone!?

 

[maflynn]

I’d rather pay off the mortgage!

I wish I could pay off my mortgage with a thousand dollars

 

[69Mustang]

So what your saying only rich folk should have the privilege of owning a watch or a iPhone , your ignorance of the ( I think you see yourself as a upper class ) working class is out of date my friend come off your high pedestal and don’t be so bloody ignorant

Ignorance and ignorant. Ironic considering you read my quote and still posted your reply. If you weren't projecting your own circumstances onto my words, you would have read them more carefully. I bolded necessary and needed, used quotation marks on "wants", and you still failed to understand what my quote says. That quote has nothing to do with class distinction - that is all in your head. There's no way possible to look at the words in my quote and come up with what you did... except projection.

Some of us working class know how to - this might blow your mind - save money to buy things. It's a novel concept I know, but it works.

 

[8012R3]

I wish I could pay off my mortgage with a thousand dollars

Well, yeah. You know what I mean. Make a contribution to the mortgage.. 2 to 3 months worth of payments.

 

[Askolan]

I guess most people won't be able to afford an apple car.
Which will probably be much more expensive than the usual car.

And you can only fill it with iGas® premium gasoline for your own protection.

 

[jonnysods]

That will only drive up prices like crazy...

 

[5105973]

I will always finance if it's a 0% interest loan (e.g., through carriers) and if the product is something I could pay cash for. I'd rather keep the money in an account earning interest than having to pay it off up front.

That makes sense financially. However, I can’t hear or see the name Goldman Sachs without getting shivers like the characters in the Harry Potter books did whenever the name of Voldemort was mentioned. I can’t help feel that signing on to anything with that firm’s name on it is like signing a contract in blood to Ol’ Scratch.

Lol, I’m sure there are some great people working there. It’s just the name has a hint of tarnish to it, to put it mildly. I worked in the world of finance for one hellish year so I got to see how very different SOME of those investment people are. The ones who are different don’t speak of their homes and family in the personal, affectionate, sentimental way most folks do. They literally stick a dollar value on everything in casual conversation every day, all day and seem to value their spouses and children only by their achievements and looks. Fortunately there are nice normal people in the business, too. But if you see the cold “reptilian” ones in action, it will stay with you for life. I’d never seen people like that before in my life, so it was a huge, profound shock. I mean it, it chilled me the way those people were. They’re so different, I almost felt like I was among a different species. I’ve never seen people like that before or since.

All that aside, it sounds like Apple is determined to stay at this stratospheric price point and will make a deal with the devil to ensure it can be feasible.

At this point in my life I actually can drop as much as $2000 at a pop on whatever the hell I want. I just can’t bring myself to do that on an iPhone anymore. I enjoy playing with smart phones as a hobby...but jeez. I tried with the X and it just didn’t sit right.

 

[MacTiki]

Same logic with a car or a house? Just because you don’t have the money upfront doesn’t meant you can’t afford it.

This maybe the best argument for NOT purchasing a phone on a loan.

To compare the purchase of a phone (with a 2 year life expectancy) with the purchase of a car (3 - 10+) years or house (20+) years as a similar purchase seems to be I’ll advised.

And “just because you don’t have the money upfront...” to pay for a phone to me seems that that person doesn’t realize they can’t afford the phone.

People would have been better off if the systems of mortgages and loans had not been devised.

Mortgages were implemented to keep the money flowing into the economy (government) and bankers pockets under the pretense of the “American Dream” while saddling the bower with debt. Some say a slave to debt.

Mortgages and loans foster the “Keeping up with the Joneses” mentality and has contributed to never the never ending cycle of people thinking they got to have it and merchants saying got to get more money for it. Is this not what has happened to the iPhone? And the current state of graphics card prices is this in spades.

Latin words: ‘mort’ and ‘gage’. ‘Mort’ means ‘death’ and ‘gage’ means ‘pledge’. A mortgage is a dead pledge. Most will be dead or near death before they pay off their mortgage and the rest will wish they were dead.

 

[Rogifan]

I can understand financing An $1,100.00 iPhone through your carrier, because that is a lot of money for someone to pay in full up front. But even if you could, why would you finance an Apple Watch? I just feel like this is a way for someone to make an excuse to get themselves in debt that they don't need (Which adds to other monthly bills someone has). If Someone has the necessary funds, I would just pay it off and not finance. But I do understand its more 'comfortable' to make monthly payments, even though it's not always the most logical method just because it's an option to do so.

I’m not financing my iPhone X through my carrier I’m using the iPhone upgrade program. I would only do it in a situation where I could turn my device in every 12/18 months and get a new one. And I would only do it knowing I can afford to make the monthly payments.
[doublepost=1518014658][/doublepost]

I agree. If I need to take a loan to buy a phone, then it’s probably not a phone I should be buying in the first place.

Why is an interest free loan a bad thing? That’s what the iPhone upgrade program is.
[doublepost=1518014764][/doublepost]

If you need a loan to buy a $1000 phone, you shouldn’t be buying that phone.

So if you can’t pay up front for new furniture or appliances for your house you shouldn’t buy them?

 

[JRobinsonJr]

I can understand financing An $1,100.00 iPhone through your carrier, because that is a lot of money for someone to pay in full up front. But even if you could, why would you finance an Apple Watch? I just feel like this is a way for someone to make an excuse to get themselves in debt that they don't need (Which adds to other monthly bills someone has). If Someone has the necessary funds, I would just pay it off and not finance. But I do understand its more 'comfortable' to make monthly payments, even though it's not always the most logical method just because it's an option to do so.

I'm 99% in agreement with the following exception: paying 0% interest is a great way to leverage someone else's money to get things you want (need?). Even if you can afford to pay cash... why would you? Pay it out over X months and save your cash. Smart money management. Of course, if you do that too much you can just as easily end up in trouble, so 'smart money management' must include some checks and balances (no pun intended).
[doublepost=1518015002][/doublepost]

This maybe the best argument for NOT purchasing a phone on a loan.

To compare the purchase of a phone (with a 2 year life expectancy) with the purchase of a car (3 - 10+) years or house (20+) years as a similar purchase seems to be I’ll advised.

And “just because you don’t have the money upfront...” to pay for a phone to me seems that that person doesn’t realize they can’t afford the phone.

People would have been better off if the systems of mortgages and loans had not been devised.

Mortgages were implemented to keep the money flowing into the economy (government) and bankers pockets under the pretense of the “American Dream” while saddling the bower with debt. Some say a slave to debt.

Mortgages and loans foster the “Keeping up with the Joneses” mentality and has contributed to never the never ending cycle of people thinking they got to have it and merchants saying got to get more money for it. Is this not what has happened to the iPhone? And the current state of graphics card prices is this in spades.

Latin words: ‘mort’ and ‘gage’. ‘Mort’ means ‘death’ and ‘gage’ means ‘pledge’. A mortgage is a dead pledge. Most will be dead or near death before they pay off their mortgage and the rest will wish they were dead.

Well said!

 

[Chupa Chupa]

That will only drive up prices like crazy...

How so? Consumers can already buy/lease in monthly installments with either Apple or their CellCo. All this really represents is a switch from Apple's current financing provider to Goldman.

 

[mtneer]

I'm struggling to understand your logic on this one. The apple program is a zero interest program. Credit cards almost always have interest, barring some no interest promotional periods. Shouldn't your argument be - if you can't afford an iPhone, you have no business going into business with GS? Frankly, it's each individuals choice because its their money to spend how they decide.

Actually why would Apple, or Citizens Bank, give anything up for 0% if there wasn't something for them to take? They are profit making entities after all. I don't know the fine print behind what the Apple Upgrade program charges, but most other 0% deals have a trigger deadline in the fine-print where the bank retroactively charges some high interest rate on the full loan after a few months.

 

[i hate phones]

as long as IUP stays 0% interest...

 

[CarpalMac]

You're correct, I just don't like having debt personally. Especially with tech products, I would rather just pay it off and have the advantage of owning it without carrier restrictions, monthly payments, etc.

Oh likewise. If I cannot afford to buy a tech device outright, I simply won't buy it. I haggled money off my furniture by not taking out the 0% finance. Nothing like that is ever truly free.

 

[EdT]

You should check the prices in Europe. 1000 bucks is not that much when you compare. I paid 1500 USD for my iPhone X 64 GB.

If you buy Apple Care here in the states the X costs $1450.00, so the cost isn’t that different. And if you use Apples monthly 2 year payment plan you HAVE to buy Apple Care.

That price is for the 256 GB iPhone though.
[doublepost=1518017736][/doublepost]

And you can only fill it with iGas® premium gasoline for your own protection.

No, it will be battery powered. So after a few charge/discharge cycles the car will run slowly and may just stop.