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Monthly fees rather than annual updates will fill Apple’s coffers in the years to come
Apple used to update products as and when something new and exciting was developed. Such events would be a surprise, rather than being expected to happen at regular intervals. But in the wake of the iPhone’s stellar success, industry demands reshaped Apple, resulting in its most popular product being reinvented – or at least massively updated – on an annual basis, like clockwork.
But as the excitement of new iPhones wears thin, and sales start to plateau, Apple needs new ways to add to its already gargantuan cash pile. It seems the company believes the solution is services.
Apple’s history with services has been spotty, but of late it’s mostly come good regarding quality and reliability. And in recent weeks, we’ve heard Apple Music (unlimited music streaming for a monthly fee), and iCloud (online storage and syncing for your data and photos) will soon be joined by a paid Apple News subscription service, the Netflix-like Apple TV+, and gaming service Apple Arcade.
However, this isn’t the only kind of monthly service Apple offers. Given how expensive iPhones are, the company a while back hit on the iPhone Upgrade Program. This spreads the cost of an iPhone over a number of months (24 in the USA), but unlike most loans comes with no interest attached.
Proponents will point to a major benefit being that anyone in the iPhone Upgrade Program can upgrade their phone every year. That said, you don’t get to sell on the old phone yourself, because you hand it back before getting your new one. So short of you buying out the contract and ending it, this is closer in nature to iPhone rental than ownership.
It doesn’t take a genius to see where this is all heading. At some point, Tim Cook will reveal something like iPhone+. This won’t actually be a plus-sized iPhone (we already have one of those), but a kind of all-in-one services bundle from Apple.
You’ll get a current iPhone, as much iCloud storage as you can eat (within reasonable limits), and access to all of Apple’s media services. In return, Apple will suck money from your bank account every month, like a pristine, minimal, aluminum vacuum cleaner designed by Jony Ive.
This sounds almost dystopian and devious – and yet brilliant. Priced right, it could be ideal for existing Apple users and newcomers alike who’d splash out for these things individually, and therefore may appreciate a simple, efficient, more affordable, all-in-one bundle.
For Apple, though, it’s perhaps the biggest boon, replacing a dying business model where individuals make massive one-off payments into something long-term, reliable, and sustainable.