May 18, 2024

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The report says that Apple plans to subscribe to an iPhone that could be launched this year

The report says that Apple plans to subscribe to an iPhone that could be launched this year

An employee arranges Apple iPhones as customers shop at an Apple Store on 5th Avenue shortly after new products go on sale in Manhattan, in New York City, March 18, 2022.

Mike Segar | Reuters

an Apple Preparing a hardware subscription service for iPhones that could launch as soon as the end of this year, Bloomberg reported on Thursday.

The service will allow customers to purchase the iPhone through monthly payments, similar to how users currently subscribe to iCloud, according to the report. Apple declined to comment.

This step will be the culmination of long time ago Apple investor desire The company sells its devices as a subscription. Doing so will increase recurring revenue and can lead to an increase in the stock price. Analysts have long been wary that Apple’s massive hardware sales are a “business business” and believe that more predictable subscription revenue could lead investors to appreciate Apple more.

Apple shares rose briefly on the news before giving up gains. It rose less than 1% during Thursday’s trading.

Apple already offers several ways to pay for iPhones on a monthly basis, including the iPhone Upgrade Program, which bundles iPhones with warranty and free upgrades for a monthly fee, and financing with Apple Card.

Apple executives, including CEO Tim Cook, told investors to keep a close eye on its services business, which reported $68.4 billion in sales in 2021, a 27% increase. Apple’s services business currently includes warranties and services such as iCloud, Apple Music, and sales from the Apple App Store.

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Apple’s iPhone business recorded nearly $192 billion in sales during the same period.

In 2019, cook Asked during earnings call Whether Apple will consider subscribing to hardware. He didn’t drop the idea and suggested that Apple was working on similar products and something like that was already in effect.

“In terms of hardware as a service or as a package, if you will, there are customers today that are basically seeing hardware like that because they are on upgrade plans and so on,” Cook said during an earnings call. “That does exist to some extent today.”

Read more on Bloomberg.