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Is Apple Considering a Smartphone Subscription for iPhones?

  • Nadine Ghiran - SUBTA
  • Mar 31, 2022
  • 4 minute read

Apple is reportedly planning on launching a smartphone subscription service that allows customers to pay a monthly fee for their iPhone products, according to Bloomberg.

It would be the first time that Apple offers a subscription-based payment option for its smartphones. However, it wouldn’t be the first subscription of its kind.  

Read on to learn what we know about Apple’s alleged smartphone subscription, and the importance of creating flexible subscription offerings.

What We Know About Apple’s Smartphone Subscription

Apple’s rumored new subscription service would be the latest company initiative to increase its presence in the subscription space and generate additional recurring revenue streams. The company has launched a variety of subscription offerings, including Apple Music, Apple TV+, and Apple Arcade

The smartphone subscription would launch between the end of 2022 and the beginning of 2023, and Apple has discussed the possibility of bundling it together with Apple One and AppleCare, according to Mark Gurman of Bloomberg. 

Currently, Apple customers can purchase an iPhone in 24-months installments, or access special payment options through certain carriers. In contrast, the smartphone subscription service would charge a monthly fee that varies based on the iPhone model the customer chooses.

Though the subscription has yet to be confirmed, it wouldn’t be the first of its kind. 

In June of 2020, Samsung released its own subscription offering, called “Samsung Access.” Customers can choose between two smartphones, select which exclusive perks they wish to add, and cancel or upgrade to a new model at any time.

Customers had mixed reactions to Samsung’s news. One user commented, “​​Getting a Galaxy S20 through this program is cheaper than what I’m paying for my S10e through AT&T,” while another commented that they would rather owned their phone than subscribe to one.

While Samsung is enabling its subscribers to upgrade their devices, Apple has yet to indicate if it will allow its customers to swap their devices as new models are released, according to Bloomberg.

The Unknown & Community Feedback

The iPhone subscription service has generated a lot of questions and reactions from the Apple community, many of which have not been answered by current reports or Apple itself (Apple did not respond to SUBTA’s request for a comment). 

Users are wondering how different this rumored subscription is from the iPhone Upgrade Program.

Customers already have the option of picking up a new iPhone every year for a monthly fee that includes AppleCare+ and a variety of other services. Although the iPhone Upgrade Program is compatible with all phone carriers, customers question if the smartphone subscription will work the same way.

Similarly, it’s unknown how this will impact retail stores like Best Buy, Target, and Walmart or carrier stores like Verizon.

Best Buy’s computing and mobile phone purchases made up 42% of its Q4 FY22 sales. No details have been released as to whether or not customers could subscribe to an iPhone at stores like Best Buy. If they weren’t allowed to, retailers’ sales could drastically decrease. Verizon, AT&T, and other carriers could encounter similar issues.

Apple users are also concerned that the alleged subscription would eventually force them to subscribe to the apps they currently own on their phones. 

As of now, there are more questions than answers regarding Apple’s alleged plan. But if true, this new option could make one of the most popular products in the world more accessible, presenting the company with the opportunity to expand its customer base.

Creating Flexible Subscription Offerings 

Nearly 40% of American consumers reported that their phone was the most important item they owned during the coronavirus pandemic, according to WalletHub, with roughly 20% saying it would be worth taking on credit card debt to purchase a new iPhone.

Apple’s rumored smartphone subscription service would make the device more affordable and enable customers to stay debt-free.  

In similar fashion, Peloton recently tested a new pricing strategy to combat concerns of inaccessibility and high prices. Its new offering bundles both the stationary bike and the workout-courses membership in one monthly fee that ranges between $60 and $100 (the bike alone costs anywhere from $1,495 to $2,495).   

“Consumers crave subscription experiences that provide flexibility,” says Jennifer Cline, Director of Marketing at SUBTA. “We consistently hear this feedback among subscribers; they’re looking for convenient and affordable ways to purchase from brands on a recurring basis. Meeting this demand can help companies see higher profit margins.”

Whether or not Apple decides to go forward with the launch of its smartphone subscription remains to be seen (and confirmed). One thing is for sure: Apple has built a product that is used around the world despite costing as much as $1,099. If the company were to make the iPhone accessible, there is no telling how much its customer base would grow.

Key Takeaways:

  • Apple is rumored to be launching a smartphone subscription service for its iPhone products.
  • According to Bloomberg, Apple plans to launch this service in late 2022/early 2023.
  • The price point, carrier compatibility, and subscription tiers are all unknown factors.

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