Apple wants customers to be able to experience its hardware and software with temporary ownership at a small fee. But the math isn’t very rewarding.
Apple’s rumored plans to launch a hardware subscription service are currently a hot topic of debate among industry experts and enthusiasts. The idea is simple. Apple will loan a gadget with its Apple One and Apple Care service as a bundled package, and interested folks will pay a flat monthly fee to own it temporarily. The service is said to cover iPhones, Mac and Apple Watch and will reportedly go live by the end of 2022. Now, nothing is official, and the plans might change down the road, so it is worth keeping the high expectations and enthusiastic hopes in check.
But assuming Apple goes ahead and introduces a hardware subscription service, it will be a significant strategy shift in how Apple markets its products. All of it sounds like a glorified rental — an ambitiously hands-on approach to moving products off the shelves by letting customers try a product as if it was their own. But only for a few weeks or months. And at a higher price than what one would pay with a financing plan. But Apple is not just loaning its hardware but also giving a paid demo of its popular services such as Apple Music, Apple Fitness and iCloud+, among others.
And it all sounds like a win-win strategy for both parties. Of course, Apple’s services are best served on Apple hardware. But so far, the predominant way in which Apple has added subscribers to its services has been via users that are already a part of its hardware ecosystem. Folks who are interested in experiencing Apple Music’s Spatial Audio with Dolby Atmos trick or iCloud+ Private Relay or Hide My Email were left out of the pool because they don’t own Apple’s hardware, and owning one is not easy on the pockets. Yes, a 24-month or 36-month payment system is not as taxing, but there’s always the risk that a customer might not end up liking the product and gets stuck with an unpleasant experience for the next few years. As reported by Bloomberg, a hardware subscription plan sounds like the perfect no-frills no-fuss route for experiencing the best of Apple without any long-term strings attached.
Good Business For Apple. Not So Much For Customers.
For Apple, it’s an opportunity to go beyond clever ads and flashy keynote events to market its products. It’s an opportunity to serve real hands-on experience for a meaningful amount of time, not just a person fiddling around with an Apple gadget for a few minutes in a store. And it sounds like something Apple’s former chief Steve Jobs would approve of. “Customers don’t form their opinions on quality from marketing,” Jobs said in an interview back in the 1990s. “They form their opinions on quality from their own experience with the products or the services.” With a subscription service, Apple will lower the barrier for experiencing its products and services to an all-time low. But as good as it sounds, it probably won’t be worth it at the end of the day, and simple math would justify the sentiment to a large extent.
The iPhone 13 currently starts at $33.39 for a 24-month plan. Add the cost of Apple One for a month, and the monthly rental due touches the $50 mark. Now, heap on top of it the price of Apple Care, plus the premium for more expensive Pro models, and the lease charges will likely fall anywhere between $60 and $70 each month. Moreover, it is unlikely that Apple will let customers rent an iPhone for just a month, flaunt it, and return it. Apple’s hardware subscription wil probably come with a minimum rental period caveat. Imagine loaning an iPhone 13 Pro Max for about six months and paying north of $400 for it. For that amount, one can pocket the 2022 iPhone SE. Or, forking out that sum will be equivalent to paying off half the iPhone 13’s asking price with a 12-mount financing scheme. Or one-third of the iPhone 13 Pro Max itself with a similar financing span.
Then there is always the risk of physical damage to a rental phone or Mac. Apple hardware repairs aren’t particularly forgiving on the pocket, so there’s that too. For folks willing to pay hundreds of dollars for merely experiencing Apple’s hardware and services, only to return it in a few months, it’s all good and fine. But for the rest clamoring to own an iPhone or Mac without vaporizing their savings instantly, finding a low-interest financing plan and pairing it with Apple’s upgrade program is still the best way to go forward.
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