Apple plans to launch a new hardware subscription service, or change the "game rules" of global consumer electronics

It is reported that Apple is planning new subscription services for hardware products such as the iPhone to develop a new business model, users may be able to get hardware and then pay, but also expected to update the product. A buy-first-pay sales strategy could be a game-changer for the global smartphone industry.

(Source: Official Account Public Photo Library)

According to the analysis, once Apple launches a hardware subscription service, it will bring a huge boost to the company's automatic repeated sales. However, it is reported that the project is still under development, and so far, Apple has not officially announced any plans for hardware subscriptions, or changes to existing subscription plans.

How will Apple operate the new hardware subscription service?

It is said that users are likely to be able to use the new hardware subscription service simply by using their existing Apple ID. Users can also use apple IDs to purchase apps and digital subscriptions on the Apple App Store or official website, as well as hardware subscription services through the Apple Online Store or Brick-and-Mortar Retail Store.

It is worth mentioning that the new hardware subscription plan is far from being as simple as the previous installment plan, in fact, Apple is already providing an installment plan for hardware products, and users can pay a fixed monthly fee to purchase products in batches. In contrast, in the new hardware subscription service, the monthly fee will be more flexible, which can be flexibly changed depending on the different device options that the user subscribes to.

What may excite Apple fans may be the hardware service's expected continuous upgrade plan, when users can continue to use the latest version of the iPhone, iPad or MacBook immediately after each Apple release after a large one-time fee.

It has also been reported that the new hardware subscription plan is likely to be linked to Apple's existing AppleCare and Apple One plans.

The Apple One plan is Apple's bundled subscription service that allows users to bundle multiple separate services they subscribe to in order to get a better monthly payment fee. Recently, Apple has paid more and more attention to subscription services, and launched a number of subscription services such as Apple Arcade, Apple TV+, and Apple Fitness+.

It is conceivable that through the Apple One plan, Apple games and iPhone hardware can be bundled together to subscribe, and then subsequent payments can be made through monthly fees.

For the continuous upgrade program that the hardware subscription service may launch, in fact, Apple Card already has a similar service. Users can not only pay for their iPhone with apple cards, but also replace their iPhones with the latest model every year through Apple Card's iPhone upgrade program.

Apple's new sales strategy could be a game-changer for the consumer electronics industry

In fact, Apple's product sales are facing an increasingly difficult bottleneck to find growth points. Especially in the new market is becoming more and more difficult to open, and the main source of revenue accounted for the iPhone and other products of user upgrades, the replacement cycle is relatively long.

Most of Apple's current revenue comes from the Americas, followed by Europe, China, Japan and other parts of the Asia-Pacific region.

Although the company is working hard to expand into the Indian market, it hopes to take a larger share in the country, which is known as the second largest smartphone market in the world. But for a long time, due to the high prices of devices such as iPhones, iPads and Apple computers, Apple has not escaped the criticism of locals.

Therefore, in India, the market share of the iPhone is still very low compared to the sales of mobile phones using Android applications such as Samsung, Xiaomi, Oppo, Vivo and Realme. Relevant data show that although Apple has landed some models of mobile phones, including iPhone 12, to be produced locally in India, the market share of iPhones in the Indian smartphone market is still only 4%.

Hardware products such as the iPhone, apple's main source of revenue, are also facing the bottleneck of increasingly difficult to introduce new features that impress users. It is worth noting that in fiscal 2021, more than 52.5% of Apple's total annual revenue will come from the profit from iPhone sales.

In addition, most users will use the mobile phone for many years after purchasing, and for Apple, the continuity of this sales source has gradually become a new challenge for the company.

In this context, the launch of hardware subscription services could be a major strategic shift for the international giant, adding new business models to the current sales models of full-price direct sales, installment payments, and carrier subsidies.

This new sales strategy will not only help Apple generate more revenue, but also attract more customers to buy new Apple products, convincing them that it is worthwhile and reasonable to spend thousands of dollars on an iPhone.

After the news was reported, Apple's stock price rose rapidly, jumping to an intraday high, and the closing price rose 2.3% to $174.07 on the day of the news release. Although Apple's stock price has fallen 2% since the beginning of the year, it has been on a good trend in recent days, and has risen for eight consecutive days, the longest rise since last November.

It is reported that Apple's hardware subscription plan is expected to be launched at the end of 2022, but the possibility of this plan being delayed or canceled is not ruled out.

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reference:

https://dazeinfo.com/2022/03/25/apple-hardware-subscription-service-a-game-changer-for-iphone/

https://www.pcmag.com/news/apple-reportedly-eyeing-hardware-subscription-service