Apple’s iPhone subscription service could be the perfect trap

It is said that Apple would be preparing a big change in the way it sells iPhones. You can still pay more than €1,000 for the latest iPhone, but if you want, the company is rumored to launch a new subscription service that will allow you to rent iPhones and other devices for a fixed cost.

Not many details are known yet about the program, but it is said that it will start with the iPhone before expanding to other devices. Currently, Apple already has the iPhone Upgrade Program in the United States, which allows you to spread the cost of a new iPhone with AppleCare+ over two years.

In other markets you can finance it too, but in this case, you get a loan that requires a credit check and monthly payments to a bank, with the option to upgrade to a new model (and loan) after 12 payments.

If you regularly switch iPhones, it’s the perfect program for all parties involved. You get a new iPhone and Apple retains a customer, while also getting a used phone to resell for a nice profit.

You can probably make more money by selling a year-old iPhone privately or to a third-party reseller, but nothing will be easier than upgrading it using this program: order your new iPhone, put the old one in the box provided, and you’re good to go. There are no additional costs or hassles.

The so-called subscription service will be different, probably with a catchy name. (I’m going to call it iPhone+ in this article, but that’s just a guess.)

According to the report of Bloomberg, the service will not be so much a loan but rather a recurring fee like Apple TV +. If you subscribe, you will pay a monthly fee until you decide to cancel it, just like with Apple Music or TV+.

Mark Gurman speculates that this could mean you end up paying more for the phone than you otherwise would, but it seems likely that Apple will build in a guarantee that will notify you when payments are up, offer a trade-in, or simply lower your phone bill. automatically.

But that doesn’t mean you won’t pay more for each device. Currently, Apple’s iPhone Update Program starts at $39.50 for the iPhone 13 and $54.08 for the iPhone 13 Pro Max. This equates to $948 and $1,297.92, respectively, if you keep your iPhone for the full two years.

If not, you can change it and start over with a new phone. So you could pay as little as $474 before you trade in your iPhone and get a new one. Apple likely wants to change that with this new service.

payments forever

For the iPhone+ subscription service to work, it would have to have some added value. Apple already sells tens of millions of iPhones each year without offering a subscription service, so it would have to offer something more compelling alongside the iPhone.

Take Google Pixel Pass as an example, also available only in the United States. For $55 a month, you get a Pixel 6 Pro with Preferred Care, 200 GB of storage on Google One, YouTube Premium and YouTube Music Premium, Google Play Pass, and “Google Store deals.”

It is a two-year subscription that offers a monthly savings of about 12 dollars compared to buying each product separately. The downside is that you can’t upgrade until you’ve paid full price for the phone.

iPhone subscription service

The iPhone+ subscription service would surely be similar. Like the Apple One bundles, it would presumably offer an incentive to join and stay.

For example, Apple One Premium costs €28.95 / MXN$395 per month and you get Apple Music Family, Apple TV+, Apple Arcade, Apple Fitness+ and 2TB of iCloud storage. Individually, they would cost €45 / MXN$620 per month, so the savings are significant.

Apple could do something similar with its iPhone subscription plan, bundling one or more services and offering upgraded iCloud storage. Maybe get Apple TV+ or additional iCloud storage for free.

The key issue is updates. Would Apple allow people to switch iPhones after 12 payments like the current program? Or will you have to keep paying until you pay the full price of an iPhone? I bet on the latter.

Apple’s subscription service will offer both permanence and convenience, and a subscription service would be one way to ensure that people continue to pay for an iPhone as long as they use it. Think of it as a kind of Apple Music: You don’t actually own any of the songs in your library, but as long as you keep paying a monthly fee it seems like you do.

The interesting thing would be to see what happens with other products. Apple doesn’t offer upgrade programs for any other products, so a Mac or Apple Watch subscription might appeal to those who don’t want or don’t have the money to spend on an expensive new device.

The goal of any subscription service is to keep you paying forever, and expanding the iPhone+ program to other devices would be a great way to do that. The price of a Mac can be quite a bit more than an iPhone, and the prospect of paying a much smaller bill for much longer would be one way for Apple to get more people to get a high-end Mac.

Apple already offers a stay on its current products and services. But with a new subscription service from hardwarewe could end up paying for our products forever without actually owning any of them.

Original article published on Macworld.com.