Allegedly, Apple is trying to establish a service and service system that users can have with a subscription system instead of purchasing iPhones. The service is expected to enter service at the end of this year or early 2023.
The new model is seen as a sign of Apple’s emphasis on recurring subscription services. This model works successfully in big technology companies like Microsoft. These companies earn most of their income from subscription services, although there is no hardware involved.
Apple already offers its Prime-like Apple One subscription service, which includes (depending on the specific package) Apple Music, Apple TV, Apple Fitness, and the like. It also has a program called iPhone Upgrade Program where customers can upgrade their iPhone by paying a monthly fee.
It is not yet known what will be the difference of this new service. However, it is thought that it can work in a similar way to Microsoft’s Xbox subscription. We may also hear more about this service when new iPhone models arrive this fall.
Investors tend to opt for subscription models as revenues are consistent and predictable. They also want the subscription model as it is likely to make it easier to retain existing customers and acquire new ones.
Apple’s already subscription-powered services business like iCloud and Apple Music generated more than $68 billion in revenue last year. But over the same period, iPhone hardware sales made almost three times as much money.
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