Apple’s Next Disruption: Subscription Based iPhones & Other Gadgets For All Users!

It is being reported that Apple may launch a subscription service for the iPhone and other Apple hardware.

Revenue Contribution

The subscription service will make owning a device similar to paying a monthly app fee.

The idea is still in the works and has not been announced.

For the company, subscriptions have been extremely important as they contribute heavily to overall revenue.

So far subscriptions have been available on Apple’s software services, such as Apple Music, iCloud, Apple TV Plus, Apple Fitness Plus, and Apple Arcade.

New Trend

It also offers the Apple One bundle that combines subscriptions of some of its software services into a single subscription for a monthly fee.

However, it has not ventured into hardware products yet.

In the last few years recurring revenue took off, with startups, investors, and companies all giving it a go.

The model allows consumers more flexibility to pay for items in installments.

Apple has a financing option through its Apple Card but the service would be Apple’s biggest push yet into automatically recurring sales, allowing users to subscribe to hardware for the first time.

How It Will Work

Consumers will likely be able to opt for subscription through existing Apple IDs.

The highlight is that instead of paying installments that equal the price of the device, the charge would be a yet-to-be-determined monthly fee that depends on which device the user chooses.

It would involve the option to upgrade to new hardware as it is released for an amount that is not clear yet.

In other words, Apple will charge a fee that will include a part of the cost of the iPhone and a fee that would let one upgrade to a new iPhone next year without having to pay the full amount.

Launch

This is the iPhone Upgrade Program available in select countries through which customers can spread the cost of an iPhone over 24 months and upgrade to a new model every 12 months.

The subscription model is set to launch at the end of 2022 but could be pushed to next year or scrapped altogether.