What They Say
Apple is widely reported to be considering subscriptions for the firm’s hardware. The plan would allow consumers to swap out their devices, possibly annually. It would not simply a pay over 12 or 24 months, but a continuous charge. The hardware charge could be bundled in with software services and could cover both iPads and iPhones and could be launched at the end of 2022.
Apple already offers the iPhone Upgrade Program in the U.S., U.K., and China, which lets users pay for a new iPhone with AppleCare+ over 24 monthly payments with the option to upgrade after 12 months.
What We Think
I had two thoughts about this move. First, it’s not going to make the firm more popular with its phone service providers who supply new phones with their service charges.
Back when HD TVs were coming into the market, while consumers in the West of Europe could afford to buy new sets, there was concern that many in the East might not be able to buy them. I talked to a couple of brands about the idea of monthly subscriptions for HDTV. At least one of the TV set makers said that they wouldn’t go near this kind of deal. “After all”, one of them said, “look what is happening to margins on smartphones”. Since then, the most successful brands have done reasonably well in handsets, although for many it’s still a tricky market. (BR)
