Apple is reportedly preparing a subscription program for its devices, where users can rent an iPhone by paying a monthly subscription fee. If this program were to be launched, would it be more profitable to buy or rent an iPhone?
Although it has not been officially launched, analyst Mark Gurman from Bloomberg has provided his analysis of this program, including what distinguishes it from the iPhone Upgrade Program.
iPhone Upgrade The current program is a program to buy an iPhone with installment payments for a certain period, and if it has been paid in installments for 12 months, the consumer is entitled to the latest iPhone. After the installment is paid off, the user is entitled to own the iPhone that has been purchased.
While the subscription program is more like leasing where the user pays a monthly rental fee which is only a part of the full price of the iPhone for a certain period, and after that period is finished, must return the iPhone to Apple.
This subscription model also allows consumers to get a new iPhone every year, and Apple can resell iPhones that are returned, as quoted from ZDNet, Wednesday (6/4/2022).
Then move on to costs. Following the installment price through the iPhone Upgrade Program, Gurman estimates the monthly rental costs of the iPhone 13 series as follows:
USD 35 for iPhone 13
USD 45 for iPhone 13 Pro
USD 50 for iPhone 13 Pro Max
The average iPhone user replaces their cell phone every three years. If they pay a $50 rental fee for the iPhone 13 Pro Max for three years, the total cost is $1,800.
That figure is USD 700 more expensive than buying the iPhone 13 Pro Max directly, which is priced at USD 1,099. But users who have paid the subscription fee are entitled to get the latest generation of iPhone every year, not every three years as before.
With this subscription program, Apple will certainly make more profit from an iPhone because they can resell used iPhones as refurbished items. If the program is launched and Apple charges $35 per month to rent an iPhone, they could earn up to $4,000 per user in 10 years.
So what about users, what benefits do they get? For Apple fanboys who want to get the latest iPhone every year at a more affordable cost, this subscription program is certainly very interesting and profitable.
But for users who want to actually have an iPhone, this program certainly can't be an option. Likewise for users who want to leave their iPhone to family or friends.
Many iPhone users also choose to sell their own used devices to fund the purchase of the next iPhone because it is much more profitable. Moreover, the selling price of a used iPhone is somewhat higher than other cellphones.