We've heard news about a rumored iPhone subscription service that lets you pay monthly for access to the latest Apple hardware like the iPhone 13. We were skeptical at first, but heard the price could be very tempting.
This comes from Apple's master leaker, Mark Gurman: In his Power On email newsletter, he discusses the expected price for the iPhone subscription service, depending on the iPhone model. The numbers he picked "cut the price of the old iPhone Upgrade Program by a few dollars," suggesting that Apple will do the same with its service.
Apple's iPhone Upgrade Program is a service that allows you to spread the cost of a new iPhone over a period of time, rather than paying up front. You don't save money this way, but paying monthly can ease the financial burden for most people.
Gurman's calculations focus heavily on Apple's finances, noting that retaining audiences in the typical upgrade cycle (and selling subscribers' old iPhones) would create even more green for Apple. But he also posits that Apple's prices could be even lower than he suggests.
"The company could make extra money if the program is tied to its high-margin Apple One and AppleCare digital service packages," Gurman also suggests. Basically, this means you can also get things like Apple TV Plus, Arcade, Fitness Plus, News, and a select set of other Apple subscription services as part of the package. These could, however, drive up the price.
Since Apple hasn't even commented on plans for such a subscription service, we can't take anything for granted, but Gurman is a good source for Apple's business and his report suggests that the iPhone subscription service won't be as expensive as it seems. I expected.
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The ecosystem is one of the main reasons people buy Apple hardware: their tablets, smartphones, wearables, computers, and other devices work well together. If, for example, you trade your iPhone for an Android device, or your tablet for an Amazon Fire tablet, or your laptop for a Fitbit, you suddenly have a weak link. So you don't.
Apple is likely banking on that fact with its iPhone subscription service, especially if you go for the "financing" model where you pay for your new iPhone over time, much like you would a car. Since you pay regularly, you have more reason to stick with your iPhone and won't suddenly decide to switch to Android when a flashy new Samsung phone comes out.
This will go double if Apple Care is included in the package: it would prevent "breaking your phone" from being a good excuse to get a new smartphone.
And that will be the triple case if Apple One is added: you're not going to cancel your subscription service if you're halfway through Foundation at the time of renewal.
So while Apple's iPhone subscription service is just a rumor right now, we'd be very surprised if it didn't become a reality, as that would be Apple's next step to ensure its customers stick with iDevices, especially if Gurman's prediction that it means "big bank" for Apple is correct.