Apple is working on new ways to sell iPhones, a subscription model is one of them

A subscription plan for iPhones is being suggested by some Apple investors to bring in recurring revenue.

After a new iPhone is announced, it’s sold in the conventional way where the buyer pays the entire amount upfront. Although there’s the contract model with telecom operators where an amount is paid monthly, it’s implemented by the telecom company and not Apple. It doesn’t really offer anything apart from the device and the voice/data plan along with some perks from the carrier network. Now, some Apple investors want the company to introduce a subscription model for the iPhone.

 Apple is working on new ways to sell iPhones, a subscription model is one of them

Apple CEO Tim Cook speaks during Apple's annual Worldwide Developers Conference in San Jose, California, U.S. June 3, 2019. Image: Reuters

Coming from a CNBC report, Apple CEO Tim Cook sounded optimistic about the idea of an iPhone subscription plan during the company’s earnings call recently. This idea isn’t new and it’s reportedly referred to as Apple Prime by some people, a moniker based on Amazon’s subscription service. It suggests combining hardware upgrades with its software services such as iCloud storage, Apple Arcade or Apple TV+ for a single monthly fee.

In this mode, users won’t have to deal with different payments since everything could be taken care of by selecting the appropriate subscription pack. Switching from a transactional model to a subscription model could also potentially boost stock prices without any need to increase the prices of the products, the report said.

In the earnings call, Cook said, “We’re cognizant that there are lots of users out there that want a sort of a recurring payment like that and the receipt of new products on some sort of standard kind of basis and we’re committed to make that easier to do than perhaps it is today.” Although nothing was officially announced, it’s indicative that Apple could be moving towards a subscription plan in the near future.

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