Buying an iPhone could soon be a thing of the past, with Apple reportedly weighing up a new subscription model for the phones.
Under the potential new business model, the company would offer iPhone subscriptions to customers, allowing the business to secure continual and recurring revenue.
Having launched video streaming service Apple TV+ just this week and also pushing into gaming and news subscriptions, an iPhone subscription model would fit in well to Apple’s overall strategy.
iPhone sales currently account for around 50 per cent of Apple’s total revenue.
Goldman Sachs analyst Simona Jankowski told clients the potential change to the business model would allow the iPhone-maker to compete with other tech giants.
“We think Apple should launch a subscription bundle as a way to reinforce iPhone loyalty and leverage it into content,” she said.
“This strategy would help Apple fend off smartphone commoditisation and position it well vs. Amazon and Alphabet as content shifts to streaming.
“In our view, Apple needs to invest with urgency and scale in a tightly integrated content strategy.”
And while it might sound far-fetched, Apple’s CEO Tim Cook has recently discussed the merits of a ‘hardware-as-a-service’ model.
″In terms of hardware-as-a-service or as a bundle, if you will, there are customers today that essentially view the hardware like that because they’re on upgrade plans and so forth,” he said.
“So to some degree that exists today.
“My perspective is that will grow in the future to larger numbers. It will grow disproportionately.”
The CEO added that he is aware of the public’s interest in a subscription model and “committed to make that easier to do than perhaps it is today”.
Subscription models have been a growing trend in technology recently, most notably led by the rise of the software as a service (SaaS) distribution model.
Adobe has enjoyed great success since switching from one-time purchases to its current SaaS model in 2012.
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