Apple already has a bunch of subscription services for apps and other services but it has not yet explored the idea on hardware products. However, it might just be working towards it. As hinted by Apple CEO Tim Cook during the company’s latest earnings call, a subscription model for iPhones might be on the cards. CNBC reports that when analyst Toni Sacconaghi asked the CEO about the idea of a subscription, Cook did not deny it but instead indirectly supported it.
“In terms of hardware as a service or as a bundle, if you will, there are customers today that essentially view the hardware like that because they’re on upgrade plans and so forth,” said Cook during the earnings call. “So to some degree that exists today.” He added that Apple sees the ‘subscription’ area as one of the major growth areas. “My perspective is that will grow in the future to larger numbers. It will grow disproportionately.”
So this means that Apple can possibly ask end users to pay a monthly fee to use an iPhone along with Apple Music, iCloud and other select services.
Analyst Sacconaghi said back in January that his firm will upgrade the stock if Apple came up with an iPhone subscription plan for consumers. The subscription has been previously been rumoured as ‘Apple Prime’ but there are no rumours about it till date. Also mentioned that with shrinking iPhone sales, Apple can move to a subscription service for iPhone to reignite sales. This will also increase the recurring revenue instead of one-time sale revenue. This is something that investors value more, as per CNBC.
It also looks like Apple has already started working towards the iPhone subscription model. In 2015, the fruit company started Apple iPhone Upgrade Program, letting customers pay for an iPhone monthly including a warranty and upgrades as a part of the deal.