Report: Apple Could Start Selling iPhones Via a Monthly Subscription

Apple is reportedly working on a new subscription service that would provide customers access to iPhones and other devices for a monthly fee. The information comes from Bloomberg’s Mark Gurman, who believes the project could officially launch in late 2022 at the earliest.

According to the report, Apple’s plan is to allow customers to use the same Apple ID they use to make App Store purchases or pay for services like iCloud to subscribe to hardware. However, the service would differ from Apple’s iPhone Upgrade Program, which the company launched back in 2015 to sell iPhones on installment plans.

“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,” explained Gurman.

The iPhone remains Apple’s most important product by far, representing more than half of the company’s $192 billion revenue last year. Offering iPhones via a new hardware subscription service could make the devices even more appealing for consumers, especially in an era where flagship phones now cost more than $1,000.

The leasing aspects of the program revealed by Bloomberg are another thing that may be very attractive for iPhone fans. “The company has discussed allowing users of the program to swap out their devices for new models when fresh hardware comes out,” Gurman wrote. There’s no doubt that phone upgrades have become more incremental in recent years, but the perspective of getting a new iPhone every year via a subscription is certainly something many gadgets fans could be looking forward to.

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Conversation 25 comments

  • christianwilson

    Premium Member
    24 March, 2022 - 3:25 pm

    <p>I’ve been using the iPhone Upgrade Program for a while now. This doesn’t sound all that different to me but it does suggest a continuous flow of revenue for Apple. Even the iPhone Upgrade Program ends after 24 months if you choose not to turn the phone in for a new one before then. If this is a monthly subscription, I take that as you pay perpetually. </p>

  • spacein_vader

    Premium Member
    24 March, 2022 - 3:32 pm

    <p>I thought in the US you all did this already via network contracts?</p>

    • taswinfan

      24 March, 2022 - 6:38 pm

      <p>Basically, but I suppose it is another option. I prefer byod always. </p>

    • fishnet37222

      Premium Member
      24 March, 2022 - 7:17 pm

      <p>Not all carriers offer contracts. T-Mobile is one of them. However, they do allow you to purchase a phone from them and pay for it via monthly payments added to your phone bill. You can, however, choose to pay for it all at once. Even if you do that, though, you still have to stay with them for at least a year after purchasing the phone before they will allow you to unlock the SIM.</p>

      • SvenJ

        Premium Member
        25 March, 2022 - 12:07 pm

        <p>I don’t think any carrier has an contracts left that require you to stay with the carrier once a device is paid off. It certainly must be unlocked if paid off, by law. If any of them still have a <em>service</em> contract, it is essentially independent of the hardware. </p>

    • Travis

      24 March, 2022 - 8:18 pm

      <p>The US doesn’t do cellular plan contracts anymore. So they came up with a different way to lock you in. Now they will give you a monthly credit towards the cost of your device every month for 2 or 3 years. As long as you stick with them over that time your device is free or very steeply subsidized. If you leave the provider for someone else you are responsible for paying off the remaining balance of your device, effectively locking you in. Though many other providers will offer incentives to switch to them, like giving you $500 in bill credits for switching from a competitor.</p>

  • Aproblematicindividual

    24 March, 2022 - 5:25 pm

    <p>So…another item we do not physically own…rent to own. What can go wrong. </p>

  • Stabitha.Christie

    24 March, 2022 - 7:03 pm

    <p>It doesn’t seem particularly appealing to me as an individual but it might make sense for a company to lease phones for employees rather than purchase them outright. It would make sense if you have a workforce that is seasonal or you have a certain amount of headcount volatility. </p>

  • scovious

    24 March, 2022 - 11:33 pm

    <p>This reminds me of Xbox All Access, except I doubt Apple will bundle in services with this hardware subscription.</p>

  • jg1170

    24 March, 2022 - 11:38 pm

    <p>I find this idea absolutely revolting, but predictable given where everything is going. But I’m sure that most modern copper tops will eat this up.</p>

  • Daishi

    Premium Member
    25 March, 2022 - 1:09 am

    <p><em style="color: rgb(0, 0, 0);">the perspective of getting a new iPhone every year via a subscription is certainly something many gadgets fans could be looking forward to</em></p><p><br></p><p>And this is why we deserve the environmental cataclysm that’s coming for us.</p>

    • Donte

      25 March, 2022 - 7:55 am

      <p>This!!!!!</p><p><br></p><p>I just read how smartphones have increased the world’s Carbon index by 3% in 2020 and will be 15% by 2040. That is based on a 2year replacement schedule by users. Less than 1% of smartphones are recycled.</p><p><br></p><p>Hundreds of millions of smartphones go in land fills every year. </p>

      • Stabitha.Christie

        25 March, 2022 - 8:40 am

        <p>That is a head scratcher of a comment. If you are concerned about phones not being recycled then a subscription program would be part of the solution rather than exacerbating the problem. Apple taking back phones and recycling them, which is what they do, would mean more iPhones get recycled rather than ending up in a landfill. </p><p><br></p><p>As for increasing the carbon index, this doesn’t change the number of phones in use. If there are x many billions of phones I use it doesn’t matter if they are leased or purchased. They still use the same amount of power. Also, phone usage is pretty low on the list of things that people can do to lower their carbon foot print. The top ways that people reduce their carbon foot print are: Travel (Driving less or giving up cars altogether), Diet (eating less meat and wasting less food), Home energy use (this is where phones would play in but even then the energy they use is a drop in the bucket compared to heating/cooling, larger appliances and leaving lights on when not needed.)</p><p><br></p><p><br></p>

  • peterc

    Premium Member
    25 March, 2022 - 2:50 am

    <p>Given the rates of real world price inflation and geopolitical problems around the world this is clearly a defensive move to protect their main iPhone revenue stream going forward in some extremely challenging times. I’d be interested to see what feb/March sales and distribution figures are showing? Yes last year may have been good but I suspect there’s a sudden cliff edge in figures since February.</p>

    • Donte

      25 March, 2022 - 7:58 am

      <p>I am sure there will be some impact but I doubt it will be much. </p><p><br></p><p>Now if China invaded Taiwan it would be devastating to Apple and others. It could very well sink Apple. </p>

    • Stabitha.Christie

      25 March, 2022 - 8:46 am

      <p>Inflation is certainly a problem but doubt we will see an overall revenue drop. Consumer spending has remained solid. In the US, Apple’s largest market, wages have increased and employment is fairly strong. The inflation situation is largely seen as temporary due to disruptions in the global supply chain. If there is an impact to revenue its going to be due to supply chain rather. Where inflation could impact Apple is on profit. Apple tends to prepay for components years ahead of time which could mitigate inflation related costs but they are also likely absorbing some the inflation hit as their margins allow them to do that. </p>

  • TigerTom

    25 March, 2022 - 5:53 am

    <p>Follow the money always with corporations.</p><p><br></p><p>All used devices have to be sent back to apply for ‘recycling’. So the 2nd hand market gets gutted of working used phones and donors for parts.</p><p><br></p><p>Any repairs to the leased devices will likely have to be done at an apple authorised centre or apple store further weakening the repair/3rd party parts market.</p><p><br></p><p>Wouldn’t surprise me if Apple came out with an Apple approved used iphone plan as well to capture some more of the market that can’t afford to or don’t want to spend top coin on a brand new device.</p><p><br></p><p>Drives more traffic and revenue through their other services.</p><p><br></p><p>Clever business profit making but ultimately in a day and age when we should be making phones repairable and upgradeable to save our planet the wrong decision. But Apple are not alone in that sense.</p><p><br></p>

  • ivarh

    Premium Member
    25 March, 2022 - 7:04 am

    <p>This proves 1 thing above all else: It is expensive to be poor.</p><p><br></p><p><br></p>

  • j5

    Premium Member
    25 March, 2022 - 10:44 am

    <p>Ugh, don’t know how I feel about this. It used to be a joke that someone dies with a mortgage payment and car note, now we’re adding cellphone subscriptions to that? </p><p>My predictions if this comes to fruition: Other cellphone manufactures will follow suit, Apple and other cellphone manufactures will jack up prices and have even more expensive high end model phones…because hey it’s only $50 – $100 bucks a month…….</p>

  • iAlrakis

    Premium Member
    25 March, 2022 - 11:22 am

    <p>When I look at this from a business perspective this makes total sense.</p><p>My employer is leasing Apple and Samsung phones for years now. Every 2 years we get a new phone.</p><p>My gut feeling tells me it would be cheaper to cut out the company in the middle and lease from Apple directly.</p><p><br></p>

  • melinau

    Premium Member
    25 March, 2022 - 11:30 am

    <p>I lease my cars. I<span style="color: rgb(0, 0, 0);"> get to choose where to fill-up, maintain &amp; valet the car. </span>When my lease ends, the car is "recycled" onto the used market &amp; may "live" for another decade. It’s an EV so conceivably the batteries might then go into domestic storage units or be recycled into new ones. I also subscribe to assorted services: Netflix &amp; MS365 amongst them. I get to choose (within limits) what hardware, or OS’s I run these on &amp; can switch suppliers easily. </p><p><br></p><p>Given Apple’s track-record I suspect that their lease\rental deal will involve a substantial prescriptive lock-in to their infamous "walled garden", or at the very least an attempt to secure one. Hopefully not.</p><p>Will Apple have a transparent End of Lease programme for these ‘phones? I’d expect that at the very least they could be recycled into the used market. Ultimately, at end of life, the components must be properly recycled – not shipped to the developing world for children to extract the valuable stuff while poisoning themselves &amp; the environment.</p><p><br></p><p>Being a LOT less cynical, with this scheme Apple could be the 1st company to attempt a genuinely virtuous "green" cycle\recycle of consumer electronics. This alone might sway me into sampling more of its products.</p>

  • richfrantz

    Premium Member
    25 March, 2022 - 4:30 pm

    <p>If I don’t "own" it, does that mean they can spy on me without even telling me about it? I am thinking along the lines similar to my employer and my work PC</p>

  • ebraiter

    25 March, 2022 - 4:41 pm

    <p>OK. So you rent/subscribe a phone from Apple. Then you need a plan from cell provider?</p>

  • sadsteve

    25 March, 2022 - 7:10 pm

    <p>Just no. I use my phone to get/make phone calls, send/receive text messages (infrequently), as a calculator and as a GPS. The few pictures that I take are usually just items that the wifey wants me to pick up from the store. There’s pretty much no reason I’d want to pay a subscription fee for my use case. Heck, the main reason I upgrade from a flip phone was that 3G was going away.</p>

  • ghostrider

    26 March, 2022 - 7:05 am

    <p>With a cost-of-living crisis looming, Apple probably realise a new $1000+ annual iPhone upgrade isn’t going to be viable for many (maybe food on the table or a roof over your head is more important?). I guess they think this will ensure their continuous tidal revenue stream, with some form of lock-in I’m sure. Apple only care about shifting millions of iPhones – whether people can afford them or not is irrelevant. If a subscription service achieves that, then so be it.</p>


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