Apple has been quietly building out its subscription service for some time now, and it looks like there could be multiple offers on the first day an iPhone goes on sale. There are even two or three different versions with different price tiers for each level of subscription service, similar to what Amazon offers in its Kindle Unlimited program. But Apple decides which content service to go to. It’s also worth noting that we haven’t heard anything about an Apple TV subscription service yet, so it probably won’t happen. The Cupertino giant is preparing an “All Access” membership program that will allow customers to buy Apple devices.
New MacBook Pro and Air models with Touch ID fingerprint sensors, as well as the upcoming Apple Watch Series 4, for a monthly fee that would be cheaper than buying all these products individually or leasing them from an authorized dealer. According to New York Times sources within the supply chain, Apple has long been interested in selling more devices through subscriptions and is now focusing on building the right product mix for its future business model. Apple plans to charge $10 per month for its mobile device users. While providing access to third-party apps like Spotify or Netflix as part of the service, an exact timeframe has yet to be determined by company executives.
If Apple can get customers used to paying monthly fees to use their devices, it could significantly change how people shop for consumer electronics and how many tech companies sell their wares. The news was first reported by Re/Code, which cited sources familiar with the matter and said Apple is testing a new service with carrier partners. The service will give customers access to select iPhones at discounted prices when they purchase a data plan from their wireless carrier. Just as cable companies like AT&T offer discounted monthly rates for satellite TV service, Verizon offers discounts to some customers who subscribe to its mobile phone service under a similar program known as “Share Everything Plan 2.”
If true, it would mark Apple’s latest foray into selling subscription-based products, following the release of iCloud storage last year and the upcoming launch of the Apple Music streaming service. The report cites people familiar with the event who insist that Apple will begin selling subscriptions on its iOS devices. The service will offer users an option to pay a monthly fee for unlimited access to apps on their iPhone or iPad instead of buying them individually through the App Store as they do now. Not just for their new device, but also for any old device they owned before buying a new one from Apple. According to reports, Apple has started working with developers and suppliers to build the hardware and software components for the service and plans to launch it in the near future.
Apple executives, including CEO Tim Cook, have asked investors to take a closer look at its services business, which is expected to grow 27% to billions in 2021. Apple’s services business currently includes warranty, services such as iCloud and Apple Music, and sales of Apple App Store.
Apple’s iPhone business generated sales of about $192 billion during the same period.
In 2019, Cook was asked during an earnings call whether Apple would consider a hardware subscription. He did not rule out the idea and suggested that Apple is working on similar products and that it has already been implemented.
“In terms of hardware as a service or as a bundle, if you will, there are customers today who primarily look at hardware as such because they’re on upgrade plans and so on,” Cook said during an earnings call. “So to some degree that exists today.”