قالب وردپرس درنا توس
Home / Business / Apple lays the foundation for an iPhone or Apple Prime subscription

Apple lays the foundation for an iPhone or Apple Prime subscription



MUNICH, GERMANY – SEPTEMBER 29: Tim Cook, Apple CEO, during Oktoberfest 2019 in Kaeferschaenke beer tent.

Gisela Schober | German Select | Getty Images

Apple investors have been speculating for years about the possibility of Apple selling hardware, such as the iPhone, on a subscription basis.

It has been a hot topic of discussion among analysts because investors tend to value the predictability of repeat earnings.

During the argument for an iPhone subscription, which some call Apple Prime under the Amazon program of the same name, Apple would package hardware upgrades with services such as iCloud storage or Apple TV + content and hardware for a monthly fee. This would allow it to shift iPhone sales from a transaction model to a subscription model, potentially raising the stock price without having to dramatically increase product sales or prices.

During Wednesday's earnings talks, when analyst Toni Sacconagi asked about the idea of ​​a prime subscription, Apple CEO Tim Cook did not shoot down the idea. In fact, he suggested that something similar was already in effect.

" When it comes to hardware as a service or as a package, if you want, it's customers today who really see the hardware like it because they have plans to upgrade and so on," Cook said during an earnings call. "So to some degree that exists today."

Cook went on to say that Apple sees it as a major growth area, using home languages.

"My perspective is that it will grow in the future to a greater number. It will grow disproportionately," he continued.

Laying the groundwork

As Apple often does, for several years it has announced smaller programs and services along these lines and laid the groundwork for a larger move in this area.

In 201

5, Apple began letting people pay for iPhones on a monthly basis instead of all at once, throwing in a warranty and upgrades as part of the deal. The iPhone upgrade software packs Apple's AppleCare warranty and up-to-date hardware. Users can upgrade to the latest iPhone after paying for 12 months.

In recent years, Apple has also strongly advertised trade-ins, such as car dealers. Customers who buy a new iPhone from Apple can sell their old phone back to Apple for what actually turns out to be a discount on a new model – Apple even announced iPhone prices after a deal in stores and marketing materials.

Apple markets the program as part of its environmental efforts, but it also creates an incentive for current iPhone owners to upgrade, and gets them used to the idea of ​​relinquishing their old iPhone in exchange for a new one – just like they probably had to do during a hardware subscription.

Execs says that Apple's trade-in program is growing at a furious pace.

"We continued to see good results from our invitation program with more than five times the iPhone trade – on the volume we had a year ago," said CFO Luca Maestri.

There is also a new program, announced by Cook on Wednesday's earnings, that will give people using Goldman Sachs Apple Card free interest for 24 months on iPhone purchases.

W Although other stores with branded credit cards have offered financing with no interest in major purchases lately, Apple's features immediately raised thoughts about the long-standing reputation of the package. "Slowly but surely backing up on the & # 39; Apple Prime & # 39; s offers …" venture capitalist M.G. Siegler from Alphabet's GV tweeted about the news.

In case it was not obvious, Cook also referred to the funding.

"We are aware that there are many users out there who want some kind of recurring payment like that and receiving new products in some kind of standard form and we are committed to making it easier to do than it is today," said Cook.

Apple did not release Apple Prime on Wednesday, but Cook made it very clear that there are many people who already want the latest and greatest iPhone and are willing to pay for that privilege on a monthly basis.


Source link