Apple may soon launch a hardware subscription service, allowing customers to lease an iPhone through monthly payments and potentially trade up when new phones come out, Bloomberg reported.
While Apple declined to comment, Bloomberg said the service could launch as soon as the end of this year. It would function similarly to how users currently subscribe to iCloud, like a car-leasing program.
However, the program would not charge a monthly cost based on the price of the device divided by the lease term. Rather, it would be a monthly fee that would change based on which device the user chooses, and program users might be able to change out the devices when new hardware comes out.
According to a CNBC article, Apple investors have long wanted the company to sell its hardware as a subscription to boost recurring revenue and potentially lead to an increase in the stock price.
“Analysts have long been wary that Apple’s prodigious hardware sales are a ‘hits business’ and believe that increasing predictable subscription revenue could prompt investors to value Apple more highly,” the article said.
Apple’s stock price rose over 2% during trading on Thursday.
There are already several methods Apple offers if people want to pay for iPhones on a monthly basis. The iPhone Upgrade Program bundles the phones with a warranty and free upgrades for a monthly fee. Those with the Apple Card can also get financing. However, Apple executives have told investors to closely watch its services business, CNBC reported.
The services business includes warranties, iCloud offerings, Apple Music payments and sales from Apple’s App Store, Bloomberg said. The services business reported $68.4 billion in sales in 2021, growing 27%, while the iPhone business reported nearly $192 billion in sales over the same period.
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