Apple is currently developing a Netflix-like model in which users can pay for hardware devices through a monthly subscription, according to Bloomberg.
Though currently still in development, it would be the tech giant’s biggest venture into subscription services, and could result in both enormous revenue for Apple and an increased willingness by consumers to purchase Apple products.
According to Bloomberg‘s sources, Apple is planning to allow customers – using their Apple ID accounts – to “subscribe” to devices such as iPhone, iPad, or Apple Watch.
Unlike the current instalment payments option – in which customers pay-off their devices over a 12 or 24-month period – subscribers of the unnamed Apple service will simply pay a yet-undetermined monthly fee to use the device, with the possible option to swap devices for newer models when they are released.
Think of it as Apple’s answer to Netflix, Amazon Prime, or Disney+. But instead of contrived and over-produced original content, you get a new phone or laptop.
Apple has reportedly been developing the service for months, which they expect to launch either at the end of 2022 or next year. However, sources said it’s also possible Apple could abandon the subscription service altogether.
The iPhone currently remains Apple’s biggest source of revenue, generating a whopping $US192 billion ($A256 billion) in 2021 alone. This is despite the fact the latest iPhone 13 model costs roughly $A1300 to buy outright.
As previously mentioned, a cost-effective subscription service may forgo hefty payments and contracts, enticing even more customers to join the Apple family.
However, it’s not the first time the company has considered this strategy.
In 2016, financial analyst, Toni Sacconaghi encouraged the tech giant to embrace a Netflix-style subscription-based model in order to finally achieve a $1 trillion market value.
“Even among the quantitatively-minded investment community, many find it easier to justify a $30 monthly charge than a $720 purchase every 2 years…even though they’re essentially the same,” Sacconaghi and his team wrote.
It will be interesting to see if Apple offers any further updates on the proposed model in coming weeks.
That said, even through its traditional payment models, Apple comfortably became the first US-based company to achieve the $1 trillion value way back in August 2018.
As of March 2022, Apple currently boasts a humble market cap of $US2.86 trillion ($A3.81 trillion).
