Apple could soon turn the iPhone into a recurring subscription service

[OneMoreThing...]

Enlarge / The back of the iPhone 13. (credit: Samuel Axon)

Apple is working on a way for users to acquire iPhones as part of a subscrption service, according to reporting from Bloomberg. The service could launch as soon as this year, but it could also arrive in early 2023.

The new offering would fit neatly into Apple's ongoing efforts to emphasize recurring subscription revenue. That model has worked well for big tech companies like Microsoft, which earn most of their revenue from subscriptions, albeit mostly not hardware ones.

Microsoft does offer a hardware subscription for the Xbox Series S console, though, and that subscription might be similar to what we would see from Apple with the iPhone. Users pay for an Xbox in installments with a flat monthly fee that also includes online and software subscription services like Xbox Game Pass.

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[badshoehabit]

Always looking for new ways to make a profit. Presume this will involve a new phone at regular intervals whether you want it or not, wasting resources and creating rubbish.

 

[Lifeisabeach]

Right now I'm still rocking a XR bought new and quite frankly feel no pressure whatsoever to get the new shiny. Whenever I do decide to replace this, I'll gladly pay less for whatever these subbers trade in and rock that for a few years.

 

[MacInWin]

Always looking for new ways to make a profit. Presume this will involve a new phone at regular intervals whether you want it or not, wasting resources and creating rubbish.

I already basically have a "rental." I signed up for the Update Program a few years ago. I get a new iPhone and pay 1/24th of the total cost per month for two years. Basically, it's zero interest. Does require AC+, but I get that anyway, so I'm ok. After 12 months, the iPhone is eligible for update. Typically Apple releases a new iPhone every year, so at that 1 year point I replace the phone with a new one, return the old one to Apple. They calculate a new monthly at 1/24th of the new phone, cancel the old payment and end that "deal." So, basically, I get a new iPhone every year for about 1/2 the cost of buying one. I'm happy. If the new rental plan works the same, I'll consider it. I just hope they either keep the current update program, or the rental works out to the same cost plan. Either way would be OK with me.

 

[lclev]

I might be interested - maybe. I like owning my iPhone. That means it is mine and I can decide when I want to get a new one or keep the one I have. Currently, I keep my phone anywhere from a year to three years. They would have to create a really sweet program.

Lisa

 

[chscag]

I think of phone rentals the same way as renting (leasing) an automobile. Some folks love leasing, others prefer ownership. I prefer owning because then I can control what happens to it.

 

[Slydude]

@MacInWin Just out of curiosity, a question occurred to me. With the program you're on, does one have the option of essentially skipping a year, continuing with the current plan, and then upgrading the second year?

I'm not saying I'd do this but just for grins/ more info.

 

[MacInWin]

Sly, basically you can do what you want. If you keep paying the payment, the phone is yours, you are buying it. At the end of the second year, the payments end, you own the phone. If you then upgrade, you can keep the old phone (you paid for it fully, it's yours) and the payments for the new phone start. Basically, I'm on a zero interest 24 month loan that can be cancelled after 12 payments by returning the device and starting a new 24 month loan for a newer device.

I don't know what Apple is thinking about on the new scheme, if they are. One thing I thought of is to have the "rental" program be, say, 1/36th of the cost of the phone, but you are NOT buying it. If you keep paying after the 36th month, that's gravy to Apple and stupid on your part, except that maybe they provide extended AC+ for rentals? Who knows? Useless to speculate, really.

 

[Slydude]

I should have looked a little harder at that program when I bought my phone. It would have meant not making such a significant outlay of funds when I purchased my phone. When the new phones come out, I might jump at the chance. Assuming they haven't borked up the program by then.

 

[Lifeisabeach]

I already basically have a "rental." I signed up for the Update Program a few years ago. I get a new iPhone and pay 1/24th of the total cost per month for two years. Basically, it's zero interest. Does require AC+, but I get that anyway, so I'm ok. After 12 months, the iPhone is eligible for update. Typically Apple releases a new iPhone every year, so at that 1 year point I replace the phone with a new one, return the old one to Apple. They calculate a new monthly at 1/24th of the new phone, cancel the old payment and end that "deal." So, basically, I get a new iPhone every year for about 1/2 the cost of buying one. I'm happy. If the new rental plan works the same, I'll consider it. I just hope they either keep the current update program, or the rental works out to the same cost plan. Either way would be OK with me.

So basically, if one updates after 12 months on that program, you've paid for half the value of the iPhone, but get nothing in return by updating to a new one? Even though it'd typically be worth at least 3/4 the value when it was new?

 

[MacInWin]

So basically, if one updates after 12 months on that program, you've paid for half the value of the iPhone, but get nothing in return by updating to a new one? Even though it'd typically be worth at least 3/4 the value when it was new?

That is the negative way to look at it. The positive is that I've paid half of the price of the phone and then swapped it in for a newer one for which I also plan to pay half. The only one I will pay in full will be the final one. I guess it's not for everybody, but it works well for me. YMMV.

 

[chscag]

Probably those phones that are turned in after one year of usage are refurbished by Apple and then sold in their on line refurb store. I don't know that for sure but suspect that is what Apple does with those phones which are in good condition. As Jake says, this program is not for everyone.