This is news that will not suit split payment players: Apple plans to offer a monthly subscription that would allow its customers to change their iPhone (or iPad) every year. And this without having to pay a large sum each time, a sum increasingly paid in several instalments, or (less and less) subsidized by the telecom operators.
According to the group, it is a question of replacing the act of purchase by a kind of leasing contract without purchase option: the customer will indeed have to return his iPhone in the event of termination of the subscription. This subscription formula should be added to other already existing subscription formulas, such as subscription to Apple Music, iCloud, Apple TV + or the Apple One pack.
To subscribe to the subscription, nothing might be simpler: all you have to do is use your Apple account where the bank details are already filled in. This new subscription formula might be launched, according to the Bloomberg press agency, by the end of the year, and it might be announced next September during the presentation of the new iPhones.
Switching to a service model
Note that in the United States, there is already the possibility of renting your iPhone with Upgrade Program. But, the new subscription formula would not necessarily depend on the price of the device, spread over 12 or 24 months, but on other criteria, in particular associated services. The idea of a global package, according to different formulas, might see the light of day.
If the subscription were to be decided, it would be a real revolution for the economic model of Apple, which accounts for around half of its turnover from iPhones. This move would confirm the group’s shift from a hardware sales model to a service group with recurring revenues throughout the year (and predictable over several years).
Rise of the subscription economy
Admittedly, the subscription is not a new idea. This even goes back to the 17th century in the world of publishing. But this model is beginning to impose itself in a large number of sectors, from digital (Amazon Prime, Netflix…) to the automobile or IT, from collective services (water, gas, telecoms…) to bicycles apartments, like Peloton in the United States.
Even luxury watches are getting into it, like the Breitling brand, which offers, alongside payment in ten instalments, a subscription service to benefit from a rotation of three watches per year! This also affects more and more, especially in post-Covid, everyday consumption, on recurring products, such as the basket of organic vegetables, coffee or guitar strings.
“All these subscription models are being used more and more even if they represent real challenges in terms of the business model and internal organizations”, emphasizes Cyril Vart, vice-president of the consulting firm Faber Novel.
The advantage of the subscription is to ensure a recurrence of income over time, without the effect of seasonality. As for customers, they pay without really realizing it: it is the “frictionless” payment par excellence sought by all payment players. Especially since the digital economy has somehow accustomed the consumer to paying by subscription, which is becoming a more desired and natural buying reflex than forced or considered. “The subscription has simply become OK” for many consumers, summarizes Cyril Vart.
