Apple’s New Hardware Subscription Service

Apple is making plans to switch from the traditional outright sale of devices to a subscription type service. Their Hardware Subscription service would be similar to a lease on a car where customers would essentially be renting the devices they use. Presently Apple allows users to distribute the price of an iPhone over 2 years until it is paid off. With this new type of business model, a customer would at no time own the phone they are using but instead would be borrowing it. The potential benefits to this service would be the ability to replace broken hardware at no cost or upgrade your device when new models are released. Seeing as Apple puts out a new model phone or iPad nearly every year this could mean a potentially large amount of savings for fans of Apple products. Instead of selling one’s current phone and entering a new purchase plan every year, executives at Apple have floated the idea of allowing customers to walk into a store and switch to the newest device upon its availability.

The fitness company Peloton Interactive Inc. has had success with a similar program in which they lease their bikes to customers from $60 to $100. Although in the case of peloton one receives the bike and all the video content for it as a bundled price. At this point Apple has not announced whether or not using this subscription would allow access to other app services such as TV+, Arcade, or Fitness+. If the company decides to move in that direction this could mean consumers would have available to them the full breadth of Apple hardware and software for one easy to manage price. This could also allow the company to better predict the number of devices they need to make available to the public each year. If enough people buy into the service, then Apple could have a certain number of phone and laptops set aside for these customers. If everything goes according to plan, then Apple will most likely announce the full details of their new service at the end of 2022 or push back to the beginning of 2023.