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The iPhone could be Apple’s next subscription service target

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Apple is reportedly working on a subscription service for the iPhone, Bloomberg reported today. The service would allow users to pay for their iPhone with a subscription plan like the Apple iPhone Upgrade Program already works, but it’ll throw in other incentives like Apple One as well. It is rumored to launch either as soon as the end of the year, possibly with the iPhone 14, or early in 2023.

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Bloomberg reports that Apple won’t be offering a plan with the iPhone’s cost divided into a split of 12 to 24 installments. It is possible Apple could be trying out a rental model as seen with companies like Raylo, where a phone is rented for a period and then returned in exchange for an upgrade. It wouldn’t be unprecedented, but it would be a differentiator from the iPhone Upgrade Program which would still provide value if Apple opts to offer both concurrently. Details are scant, however, as the program is yet to be finalized.

Smartphones as a service

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Apple’s move toward a subscription service would not be unprecedented. The company has moved a lot of what comes on your iPhone into a subscription. Apple Music, Apple Fitness, Apple TV all come to mind — why not add the iPhone itself to that list? Smartphones are no longer whiz-bang tools of mystique, but they are still important enough that you’ll want to have one on you at all times.

It’s not the first plan that bundles a phone alongside services. Google’s Pixel Pass, announced with the Pixel 6 and Pixel 6 Pro, throws in carrier service and subscriptions to key Google services as well. Could Apple have taken inspiration from that? It’s not unlikely.

On a more cynical note, people are holding on to their smartphones longer than ever. Apple knows that. The company sells very good smartphones and keeps them updated for years on end, after all. A subscription plan would keep users engaged on the upgrade cycle and keep them buying from Apple forever with minimal thought.

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Michael Allison
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