Apple is dead-serious about launching an iPhone subscription model that would let you avail yourself of an iPhone on lease. Leave it to Apple to come up with ingenious ideas to extract more money than it is already piling up now. Apple’s analysts are expecting a five percent rise in revenue compared to last year, but that doesn’t mean it intends to stop now.
What is the Apple iPhone subscription model?
Apple’s iPhone subscription model is still under wraps though a lot of speculations are making rounds on the internet. The basic idea is the same as leasing out something – which means you will be leasing your iPhone for a time period and pay a subscription fee for using the device. You won’t have to spend upwards of 800 USD for a new iPhone version each year.
Why is Apple leaning heavily towards the subscription model?
Apple’s current profits are already staggering high. But that doesn’t mean it aims to tone down its efforts in building new avenues for revenue using its products. As per Counterpoint Research, Apple makes $825 from an iPhone sale. You may think it is quite good but that isn’t the reason for the iPhone subscription model.
Many of us deem iPhone to be a luxury product and stick with it for possibly as long as we can. It means that not every Apple customer is spending on an iPhone every year. This hurts the revenue stream of Apple because people aren’t buying new iPhone models each year. Well some of them do! But that number isn’t big enough to please the big guys at Apple. With the iPhone subscription model, Apple could make a lot from the users each month and build a spending loop for the customers.
Moreover, the market for used Apple products is quite large. Apple would make a fortune selling those phones as refurbished products. Thus, you can have a new iPhone every year by using the Apple iPhone subscription model. Mark Gurman at Bloomberg wrote a quite descriptive piece of what prospective subscription tiers would look like. It states that even if Apple charged 35 USD per month for the base variant of the iPhone 13. It would still be able to extract more than 50 percent of the actual price in three years. That’s some clever marketing ploy by Apple that surprisingly benefits you as well.
