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iPhone subscription service could make more money for Apple than average iPhone sale price: report

Apple is rumored to be working on a hardware subscription service that will allow users to pay a monthly subscription fee to get access to the latest iPhone every year. According to a new report, the company can make even more money compared to when users buy a new upgrade for their existing iPhone model. Meanwhile, customers wouldn’t have to shell out a large amount of money up front for a new iPhone by always updating it to the latest model.

While the Cupertino-based company has yet to announce any plans for such a subscription service for its smartphones, Bloomberg’s Mark Gurman shared estimates of how much money Apple could make from its rumored monthly subscription service in his weekly report. Power On Newsletter. Apple could reportedly earn several hundred dollars more than the original smartphone price paid by a customer over a three-year period, and more than the average selling price of a new iPhone with its rumored subscription service.

Apple’s latest iPhone models feature powerful hardware and are supported with software updates for over five years, meaning the average customer keeps their iPhone for a longer period of time. However, some smartphone users upgrade to the latest model every year, which can be an expensive undertaking. The report cites Counterpoint studies claim that the average selling price of an iPhone is $825 (roughly Rs. 62,300).

Using three different tiers, the report estimates that Apple can earn more than the average iPhone selling price of $1,260 (roughly Rs. 95,100) by charging $35 (roughly Rs. 2,700) per month for an iPhone 13 priced at $799 (roughly Rs. ). 60 300). The amount is calculated over a three-year period, Gurman said, which is the average time a user in the US waits to upgrade their iPhone.

Meanwhile, Apple can earn $1,620 (roughly Rs. 1,22,200) over three years by charging $45 (roughly Rs. 3,400) per month for the iPhone 13 Pro, which costs $999 (roughly Rs. 75,400). Finally, the company could earn $1,800 (roughly Rs. 1,35,800) on a monthly subscription fee of $50 (roughly Rs. 3,800) for an iPhone 13 Pro Max priced at $1,099 (roughly Rs. 82,900).

The report also says that Apple is making more than a 40% margin on iPhone hardware and could benefit from customers returning their old phones, which can be repaired and sold again. According to Gurman, a customer who stays in the program for 10 years can generate $4,000 (roughly Rs. 302,000) in revenue at the lowest iPhone level. Meanwhile, customers will benefit from not having to fork out a large amount of money up front every year when a new iPhone model is launched.

According to a July 2021 report, Apple is working on a service that will allow users to pay for Apple Pay purchases in installments. According to Gurman, the company is currently working on developing its own financial system and payment processing technology that could ensure its independence from partners. As mentioned earlier, Apple has yet to officially reveal any details about the planned mobile hardware subscription.

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