Plans by Apple Inc. for a subscription service for the iPhone and its other hardware products that would allow people pay for their devices similar to a monthly app fee are “still in development,” people with knowledge of the situation told Bloomberg for its report Thursday (March 24).
Moving to a hardware subscription model would mark a noticeable shift for Apple, which has typically used installments or carrier subsidies to sell its devices at full cost, but it could help the tech giant generate more revenue and make it easier for people to afford their pricy new gadgets, the report said.
The iPhone generated almost $192 billion in sales last year, more than half the company’s revenue, Bloomberg reported. An Apple spokeswoman declined to comment to Bloomberg on the company’s plans.
Apple would charge device owners an undetermined monthly fee depending on the device they chose, the report says, not split the overall devices costs into equal installments. The company is also considering a trade-in program that lets users upgrade to new iPhones, iPads or Apple Watches.
The subscription service could launch by the end of 2022, but might be delayed until 2023 or scrapped altogether, the people said in Bloomberg’s report. Apple is prioritizing its buy now, pay later (BNPL) offering, they said.
Related: Apple’s Regulatory Problems Could Hit its Crown Jewel, iPhone
In February, Apple announced its quarterly earnings were up 11% last year to a record $123.9 billion, with revenue from iPhone sales at $71.63 billion, up 9% year over year. Services, which include App Store fees, jumped 25% annually, to $19.52 billion.
Still, regulatory pressure on Apple is mounting and the recently released U.K. Competition and Markets Authority (CMA) interim report on mobile ecosystems may point at a new threat that could impact Apple crown’s jewel, the iPhone.
Besides the usual concerns on how Big Tech companies leverage their position in the markets where they are dominant (App Stores, search, online advertising) to get an advantage in adjacent markets, the regulator identified a new potential restriction in cloud gaming.
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