Apple will reportedly sell the iPhone as a subscription service

Photo by Vjeran Pavic / The Verge

According to a new report from Mark Gurman, Apple is working on a hardware subscription service that will include the iPad and iPhones.

It would fit into Apple's push towards subscription services as a whole. Over the past several years, Apple has been emphasizing recurring subscriptions like Apple Music, Apple TV Plus, Apple News Plus, and Apple Fitness Plus as key new revenue streams for the company. Many of those services have been bundled together into the Apple One bundles.

Apple added a monthly subscription model for its AppleCare extended warranty back in 2019. The program allows customers to pay for the combined cost of AppleCare and an iPhone over 24 months and the option to trade in their device after 12 months of payments. Both programs are similar to a hardware subscription.

It's easy to imagine Apple building on something like the installments model of the iPhone upgrade program, which would allow customers to add other Apple services. You can pay Apple monthly for its services, but they are still separate fees and plans to manage.

It's hard to imagine that Apple will just be giving out devices on a monthly basis, like they do for Apple. A world where Apple has customers invest months of capital into a device only to have them return it at the end of the process is not likely.

It is possible that Apple is looking to cut out the middleman and expand its payment offerings to other products. Customers of the iPhone upgrade program can take out an interest-free loan with Citizens One, which they will repay over the course of the program. Only a small group of Apple customers can pay for Apple products over monthly installments without paying interest. An Apple-based subscription service could allow Apple to expand it to other hardware products, like the iPad or its Mac computers.

One thing is clear, Apple's subscription ambitions are still just getting started.

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