Apple thinks hardware is the next place for subscription services
posted Friday Mar 25, 2022 by Scott Ertz
Apple is reportedly planning to launch a new subscription service that would allow users to purchase iPhones as part of a subscription. This move comes as Apple is looking for new ways to increase recurring revenue, which has been a focus for the company in recent years. Apple is said to be considering launching the service as soon as this year, but it's also possible that it won't arrive until early 2023.
What would the service be?
The new service would likely allow users to pay a monthly fee to Apple in order to receive an iPhone. It's similar to the way that many people currently lease their cars or subscribe to other services like Netflix or Spotify. Apple has been working on this project for a while, and it was first reported on in 2019. The company is said to be considering launching the service in the U.S. first, followed by other countries.
Following a growing trend
If Apple does launch this service, it would be following in the footsteps of other big tech companies like Microsoft. Microsoft has been increasingly focused on subscription revenue in recent years, and it now offers several different subscription services, including Office 365 and Xbox Game Pass. The company has had success with these offerings, and it's likely that Apple is hoping to replicate that success with its own subscription service.
This is not Apple's first subscription service, with subscripts like Apple News+, Apple Arcade, iCloud, and more. Apple has been trying to grow its subscription business for a while now. Apple TV+ was launched in late 2019 as part of this effort, but it has so far been struggling to find an audience.
One potential benefit of this service is that it could include AppleCare+ coverage. AppleCare+ is currently an optional add-on for many users, but if it were included in a subscription service, it could entice more people to sign up. Apple is said to be still debating whether or not to include AppleCare+ in the service, so it's possible that it won't be included.
Will people subscribe?
It's yet to be seen if Apple will be successful in launching this service, or if users will actually be interested in subscribing. There is a growing trend of subscription fatigue, where people are becoming overwhelmed by the number of different subscriptions they have to keep track of. Apple will need to make sure that its offering is compelling enough to overcome this obstacle.
Subscription fatigue has been driven primarily by video streaming services like Netflix, Hulu, and HBO Max. However, with the success of those services, it seems every industry is interested in testing the subscription service. Even CVS has got their CarePass subscription.
Of course, Apple already offers several different subscription services, including Apple Music, Apple TV+, and iCloud. It's possible that the company is counting on users being willing to pay for yet another subscription, but there's also a risk of "subscription fatigue," where users become overwhelmed by the number of different subscriptions they're paying for and decide to cancel one or more of them. Only time will tell if Apple's new service is successful.
The company is reportedly still working out the details of the service, so it's possible that things could change before it launches. We'll just have to wait and see what Apple has in store for us.
