Apple mulls implementing subscription model for all iPhones

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Apple users may start paying a monthly app fee to own their devices instead of buying them through the conventional method.

According to Bloomberg, Apple Inc. is working on a subscription service for iPhones and other hardware products. This will allow users to subscribe to hardware products such as MacBooks and iPads rather than just digital services such as iCloud.

In simple words, with the subscription model, customers will not be owning Apple products but would pay a monthly fee to use Apple products, like a person paying rent. 

The idea of the program will differ from installments as users will not be paying for the full price in 12 or 24 months. The program will also allow users to upgrade to new hardware as it is released for an amount that is not clear yet. 

Apple will charge users a fee that will include a part of the cost of the iPhone as well as a fee that would let you upgrade to a new iPhone without paying the full amount. Apple users will use the same ID and App Store account they use to buy apps and subscribe to services today.

Apple generally sells its devices at full cost outright, through installments or carrier subsidies thus adopting hardware subscription is a major strategy shift. The initiative could help Apple attract more revenue as it will mean the generation of automatic recurring sales. 

The report also stated that the project is still in development and Apple is hoping to launch the new service by the end of 2022 but could be postponed to 2023 or even end up being cancelled.

Apple has a similar program which launched in 2015 referred to us the iPhone Upgrade Program which lets users spread the cost of an iphone over 24 months and upgrade to a new model every 12 months.

Apple Inc. is not the first company to make the drastic shift.

In 2013, Adobe ceased selling its software outright and its customers were obligated to pay a monthly access fee. In 2017, Gillette, a renowned company that sells personal care products, introduced a subscription model which allowed its customers to either buy blades as needed or build a custom subscription as a way to keep up with competition.

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