FYI, when you actually go through the application process from CIT Bank (linked from this article), it says the minimum amount financed is $10,000. Also, you'd likely need to have a TIN (Taxpayer Identification Number) meaning you'd need to be incorporated.
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Apple Introduces New MacBook Upgrade Program for Business Partners
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Could it be that customers less often upgrade their computers because a Mac Upgrade Program is not offered publicly to regular customers.
Ok, correction: Apple probably expects the vast majority of machines to be on a 3 to 5 year replacement schedule under this plan.
Two years ago, a 16" MacBook Pro started at $2,399 which would be $72/month under this program. If we assume the device is worth at least $1,000 (?) wholesale/trade today, the company would've ended up having spent $1,399 net or $58/month. The balance is interest and other costs of $336. $336 interest on a 2 year $2,399 loan is about 13% APR.
Hi, I used to be an Apple Small Business Account Manager in San Francisco.
This really isn't very new. My main job was to get business customers to sign up for leases that would allow them to pay monthly and then return the devices every 2 or 3 years. CIT was the finance then and still is.
We would highlight the tax savings, as there is no sales tax (in California) when one leases the equipment and we would ask the customers, "How many old devices do you have and how do you deal with getting rid of them?" They normally would say that they have a closet and found that it was difficult to legally transfer ownership to the employee. All that makes a lease pretty enticing.
Cheers,
Max
This really isn't very new. My main job was to get business customers to sign up for leases that would allow them to pay monthly and then return the devices every 2 or 3 years. CIT was the finance then and still is.
We would highlight the tax savings, as there is no sales tax (in California) when one leases the equipment and we would ask the customers, "How many old devices do you have and how do you deal with getting rid of them?" They normally would say that they have a closet and found that it was difficult to legally transfer ownership to the employee. All that makes a lease pretty enticing.
Cheers,
Max
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Consumers and businesses tend to think of computers differently - To a business, it's a depreciating asset with a defined lifetime. To a consumer it's a large purchase that will be replaced when it's out of date.
This is aimed towards the business model of the computer being replaced regularly and the cost amortized over it's life. For consumers, there's the trade-in program.
I have really enjoyed the iUP. I can't imagine they haven't discussed similar programs for other hardware. I'd be interested in both Watch and MacBook Pro Upgrade Programs.
Usually when I mention the $350 a month, people scoff and say "That's $4200 a year. you're insane!" but in my annual 'cost to be a fanboy' post, it's a LOT more to buy everything new from Apple. there are still people out there who like me want to have apple's latest stuff and while it no longer makes economical or really performance gains sense to upgrade every year, the urge is very strong for me and I usually end up giving in. In 2021, I've purchased
1. AirPods Max
3. AirPods gen 3
3. MBP 13"
4. MBP 16"
5. iPad Pro 13" + keyboard
6. iPhone 13 Max 1TB
7....trying hard not to upgrade my series 5 to a series 7 Apple Watch and need to just buy one already
and so in my world, $350 a month every month with 12 month upgrades would be amazing and I'd totally do it.
Here's a link to my annual post - https://adamchandler.me/blog/2021/11/08/the-cost-of-apple-fanboyism-in-2021/
While you are correct that leases have been around for a while through CIT, this lease type is new. It does require a minimum of $10K (honestly not that much if you think about 2 maxed out M1 Max MBPs..), but the deal with this one is you can cancel or return the products anytime after 90 days. And you’re only paying 3% monthly until then.
If a company is wanting to get on an upgrade cycle, then yes a FMV lease through CIT would make more sense as they typically only pay 80% of the cost of the machines. All this can be found on their website.
Hmmm, this sounds really interesting. We've been looking at migrating our laptops to Apple machines so I'll keep my eyes open in case they ever bring this to the UK market as well.
I know it says upgrade program but to help me understand better, does this mean you can upgrade your current one with a new one and fully pay it off and not upgrade again? Or does this program mean you will always pay that per month and basically be forced to perpetually update your computers? Because if this allows you to buy several computers at a low monthly price and keep them a few years after that, this would be great to use at my business.
Hi
Reach out to your local Apple Store and ask to speak to the business team.
The program isn’t new. It’s the Mac that’s new.
The discount kicks in if the company has a purchase history.
They just can’t lend to cannabis companies since that’s still not legal at the federal level.
Better to have multiple suppliers that you can then play against each other. Keeps them all on their toes.
If i do the math correctly, and assuming the program is similar to the iPhone Upgrade Program in that it includes AppleCare and that the loan is a 36-month loan, then this program at these monthly rates - monthly payment of $30 on a MacBook Air and $39 on a MacBook Pro 13" - would only be available to businesses spending over $35K per year. These are the businesses getting 7% discount on computers and 15% on AppleCare.
MacBook Air: ($999 - 7% = $929) + ($199 - 15% = $169) = $1,098 ÷ 36 = $30.50
MacBook Pro 13": ($1,299 - 7% = $1,208) + ($249 - 15% = $211) = $1,419 ÷ 36 = $39.42
It's conceivable this program could be extended to consumers at a higher monthly rate (no discounts on Macs and AppleCare) as it may entice them to upgrade every 18 months. The issue is that Apple would have to release new Macs every 18 months like clockwork, something they haven't been doing unlike iPhones every year in October. Yet now with Apple M1 chips, the company is no longer relying on other unpredictable sources (Intel), so that's totally feasible in my opinion.
MacBook Air: ($999 - 7% = $929) + ($199 - 15% = $169) = $1,098 ÷ 36 = $30.50
MacBook Pro 13": ($1,299 - 7% = $1,208) + ($249 - 15% = $211) = $1,419 ÷ 36 = $39.42
It's conceivable this program could be extended to consumers at a higher monthly rate (no discounts on Macs and AppleCare) as it may entice them to upgrade every 18 months. The issue is that Apple would have to release new Macs every 18 months like clockwork, something they haven't been doing unlike iPhones every year in October. Yet now with Apple M1 chips, the company is no longer relying on other unpredictable sources (Intel), so that's totally feasible in my opinion.
It might come to the general consumer space, but Apple is getting this going in the business space where this is a very common reality already. By allowing the business to play a monthly fee per device throwing in Apple Care+ on the device then the business is able to flat line their hardware costs from a total lifecycle perspective. Extremely common for businesses to do it this way.
For consumers, the value is much harder to quantify. The biggest "win" in it is monthly payments as are becoming the norm, but Apple already has this base covered with Apple Card Monthly Payments for users who care about going that route. Since we're well past the peak for computers and most consumers have moved onto smartphones for their main computing device they may find it much harder to economically make sense out of trying to push a frequent upgrade cycle on Macs for consumers.
I'd imagine the consumers who would bite are small portion of an already small market.
Smart on their part. They get to lease out laptops to companies for $720/year and then turn around and sell them as refurbished afterwards. Also valuable for businesses that lack up-front capital but need laptops for a bunch of employees.
First off, CIT specializes in business financing.
I don't understand why this would be "bizarre." I could just as easily ask, "Do you do all your financial transactions with a single bank/investment company?"
There's no particular benefit to Apple to doing business with a single bank - they'll shop around for the right partner/deal as the need arises. Each of these programs is free-standing and has a different structure. You'll find that different financing companies specialize in specific types of finance, so a particular type of program will generally go to the company that is a) interested in this particular kind of business, b) has systems optimized to do this particular type of business, and c) offers the most attractive deal.
Note also that the program under discussion is almost undoubtedly US-only. You'll find that Apple has different financing partners around the world, as banking/finance of this sort is bound by local laws that nearly always (or perhaps always) require that the business be done with a domestic financing company.
