Sources: Apple plans to launch a monthly subscription service by 2023 for the iPhone and other hardware that could tie into Apple One bundles and AppleCare

Apple Inc. is working on a subscription service for the iPhone and other hardware products, a move that could make device ownership similar …

Bloomberg 2022-03-25 Mark Gurman

Context & Ripple Effects

Apple had already outlined Apple One’s tiered service bundles, spanning Music, TV+, News+ and fitness. The reported hardware program would extend that recurring-billing logic from digital services to the devices themselves, with AppleCare positioned as a possible attachment point.

Follow-up coverage focused on how the rumored hardware plans might work, making this report the initial signal of Apple’s effort to connect device access, service bundles and support coverage.

First-order effects

Apple would gain a monthly-payment route for iPhone and other hardware that could be packaged with Apple One and AppleCare rather than sold solely as one-time purchases.
Prospective iPhone buyers would be offered device access through an ongoing subscription structure, with Apple’s services and support products potentially incorporated into the same offer.

Second-order effects

Linking hardware to Apple One and AppleCare would make bundle design central: Apple would need to set tiers that add recurring revenue without simply displacing standalone service or support purchases.
The subsequent coverage’s focus on extracting more revenue from existing users indicates that the program’s commercial value rests on increasing the share of customer spending captured across devices, services and care plans.

Third-order effects

If executed at scale, hardware subscriptions would shift Apple’s commercial model toward managing continuing customer relationships across device, content and support categories rather than treating the hardware sale as the primary transaction.
The proposal is part of a broader test of whether tiered bundles can sustain recurring revenue while preserving the appeal and economics of buying devices outright.

The trend: Apple is exploring a deeper subscription model in which hardware, services and support are packaged into a single recurring customer relationship.

Discussion

@markgurman Mark Gurman on x
Apple is working on an iPhone and hardware subscription service for launch by next year and it could tie into Apple One bundles and AppleCare. A major shift for Apple en route. https://www.bloomberg.com/...
@business @business on x
SCOOP: Apple is working on a subscription service for the iPhone and other hardware products, a move that could make device ownership similar to paying a monthly app fee (via @markgurman @technology) https://www.bloomberg.com/... https://twitter.com/...
@benbajarin Ben Bajarin on x
Was inevitable. iPhone is basically a subscription for most Apple customers anyway. https://twitter.com/...
@falkoopa_ @falkoopa_ on x
Turning everything into a subscription has genuinely been the worst trend of the 2010s and beyond https://twitter.com/...
@brianroemmele Brian Roemmele on x
🔮 Apple will create a more overt subscription service for hardware. From the new $2000 iPhones to the $4000 AR Devices. You will not own, you will subscribe for most of the 2020s.
@basicappleguy Basic Apple Guy on x
Livin' that subscription life. https://twitter.com/... https://twitter.com/...
@sadlyitsbradley Brad Lynch on x
Apple is reportedly planning to launch a “hardware subscription service” to make owning hardware akin to paying for a monthly service I am guessing this is how they will get consumers to adopt their expensive VR headset way easier https://www.bloomberg.com/...
@rsgnl Joe Rossignol on x
I'm going to subscribe to this [Screencap of the $52K+ Mac Pro]
@profgalloway Scott Galloway on x
From Sept 2019: Apple is also in a position to offer a Prime-like rundle. Just send me the latest iWhatever (Mac/pods/watch) with unlimited media cued up for $50/month. https://www.profgalloway.com/ ...
@dcseifert Dan Seifert on x
@m4tt the only people that pay for their phone in full up front are frequent device switchers / frugality nerds. every carrier and apple offer 0% payment plans that just put the cost of the phone into your monthly service fee, it's what the vast majority of people do.
@zollotech Aaron Zollo on x
So this whole hardware subscription plan rumor...Doesn't Apple already do this with its month to month plans for iPhone?
@lapcatsoftware Jeff Johnson on x
@rsgnl @markgurman $4,403.99/mo. for eternity
@danprimack Dan Primack on x
That's a nice phone you've got there. Would be a shame if something happened to it. https://twitter.com/...
@chrismessina Chris Messina on x
Apple Prime? https://www.bloomberg.com/...
@rsgnl Joe Rossignol on x
Gurman: “The program would differ from an installment program in that the monthly charge wouldn't be the price of the device split across 12 or 24 months. Rather, it would be a yet-to-be-determined monthly fee that depends on which device the user chooses.” https://twitter.com/..…
@dcseifert Dan Seifert on x
hot take: most iPhone buyers are already paying for their phone on a monthly payment plan, a subscription isn't a huge cognitive leap beyond that and frankly i'm surprised Apple hasn't done it already.
@christevansays @christevansays on x
I've only been saying for years mobile phones as a utility should be a subscription service since the devices themselves are part of tech's grand planned obsolescence. You're just upgrading devices every 2-3 year anyway. https://twitter.com/...
@canterrain Josh Hendrickson on x
Can anyone explain to me how this is significantly different than the iPhone upgrade program? https://twitter.com/...
@lukegromen Luke Gromen on x
“Siri, show me a way that Americans will be able to afford iPhones that are made by fellow Americans...” https://twitter.com/...
@firstadopter @firstadopter on x
Took long enough! https://www.bloomberg.com/... https://twitter.com/... https://twitter.com/...
@menakadoshi @menakadoshi on x
Apple is launching............................BN PL https://twitter.com/...
@baldbreens @baldbreens on x
Remember those TVs that you needed to put £1 coins into to use, that existed purely to abuse people already in poverty? Well, https://twitter.com/...
@crypt0e @crypt0e on x
I thought the planned obsolescence was the subscription fee? https://twitter.com/...
@leafcam @leafcam on x
Apple: But what if you want to pay 2 phone bills. https://twitter.com/...
@kentsbrokerage @kentsbrokerage on x
Is Apple turning into Rent A Center? https://www.bloomberg.com/...
@kierankelly Kieran Kelly on x
I'm basically already doing this with putting our iPhones on our Apple Card, so if Apple makes it easier to just ship me a new iPhone each year, I'm all for it. https://twitter.com/...
@chrismessina Chris Messina on x
Apple One Fusion Ultra: the ultimate rundle! https://twitter.com/...
@eshwarnag @eshwarnag on x
@Techmeme I will buy an iPhone subscription with my eyes closed if it's not too absurdly priced.
@autismcapital @autismcapital on x
You will own nothing and be happy. https://twitter.com/...
@benbajarin Ben Bajarin on x
I should also add, the reason this works so well for Apple products/HW is because of the high resale value. Those products when turned in still have second market value. https://twitter.com/...
@blakersdozen Blake Montgomery on x
iPhones are the new cars, and this is simply leasing https://twitter.com/...
@bemorte Bryan Mortensen on x
iPhone Upgrade program: “Am I a joke to you?” https://twitter.com/...
@iiiitsandrea Andrea on x
once they add glucose monitoring—you'll see them launch the same wearable x meal plan like Amazon ... meets pharmacy https://twitter.com/...
@hamburger Ellis Hamburger on x
bring back iLife https://twitter.com/...
@mgsiegler M.G. Siegler on x
Took 5 years, but yup. 📲 https://500ish.com/... https://twitter.com/...
@broximar @broximar on x
I suspect @profgalloway is going to be gloating a lot over this one. https://twitter.com/...
@alexmaxham Alexander Maxham on x
Sounds a lot like Pixel Pass. https://twitter.com/...
@andrewmartonik Andrew Martonik on x
With $0 down 0% interest installment plans that seamlessly let you trade in every year with no intention of letting the plan mature, Apple is already this | | close to having an iPhone subscription. https://twitter.com/...
@floppyadult John E Warren on x
I would like to start owning things again haha https://twitter.com/...
@connorjewiss Connor Jewiss on x
So this is why Apple acquired Credit Kudos here in the UK... https://twitter.com/...
@stevekovach Steve Kovach on x
This story is sending $AAPL higher https://twitter.com/...
@kiruti @kiruti on x
Apple working on a subscription service for iPhones and other hardware is wild to me. Isn't that called leasing in the car world?? https://www.bloomberg.com/...
@parkerortolani Parker Ortolani on x
I've wanted them to do this for awhile. If I can pay a flat yearly or monthly fee and upgrade all of my devices annually, I am totally in. https://twitter.com/...
@ivanthek @ivanthek on x
Like bundling Internet Explorer with Windows 95? https://twitter.com/...
@caseynewton Casey Newton on x
The iPhone is already a de facto subscription for most people, so this is the next logical step. Curious how they price it, though https://twitter.com/...
@daiwaka Daisuke Wakabayashi on x
Very interesting and 100% predictable. This seems like a way to prod people into more regular upgrades that they wouldn't otherwise https://twitter.com/...

Chronicles