(Dallas, TX) – Apple is reportedly planning to offer hardware subscription plans for their latest iPhones and iPads according to Bloomberg.
In such a leasing plan, you would be able to straight-up lease your device directly from Apple & don’t have to deal with your carrier. This means users can switch out a new device each year to the latest model.
While this allows people to get an Apple device without forking money upfront, it also means that you will also “over-pay” for your usage of your device. In this scenario, If you use your iPhone for at least 2-3 years, you would pretty much pay double or triple for your iPhone.
Apple did not mention if “Apple Care”, which protects devices in case of an accident, or insurance would be included with the monthly subscription. Most likely, it will be an upsell.
What About Outdated Devices?
In such a business model, the outdated devices would either be sold in aftermarket marketplaces or their parts would be reused in future devices. They could also rent out the old devices to their “Authorized Repair Centers” who could rent them out to the local demographic.
Apple has not said how they plan to deal with outdated hardware and plastics.
The company has also been known to push out iOS updates, after which the older phones get slow forcing users to get a new device. In 2017, Apple settled a lawsuit by agreeing to pay up to $500 Million dollars for slowing people’s phones down. ( Source: NPR)
More cash flow To Apple
Apple’s new plan is nothing new or unexpected as the company has been planning to shift most of its revenue to recurring revenue instead of one-time purchases.
The recurring revenue model guarantees that there will be a cash flow and since Apple’s ecosystem is so tightly guarded that people will have no other options than to keep paying their subscription.