Update: Bloomberg's Mark Gurman has been speculating about the price of the iPhone subscription service — here's how much it could cost you
Last week reports emerged that Apple is working on launching its own iPhone subscription service. The idea would be that instead of buying a phone outright, or signing up to a finance or payment plan, you get the iPhone by paying Apple a monthly fee.
The specific details are still unknown, but I can’t help feeling like the idea is completely redundant. Especially since it’s already possible to get iPhones by paying a monthly fee, with the option to upgrade when new models are released.
Apple’s iPhone Upgrade Program already functions as a subscription service or sorts. You sign up for a 24-month deal, complete with monthly payments, and after a year you get the option to automatically upgrade to the latest iPhone. That upgrade also lets you change your carrier or phone plan, and it happens without any of the hassle or costs associated with doing it yourself.
Upgrading after a year also renews the original 24-month agreement, locking people into the Apple ecosystem for another two years. It’s good for Apple, since it makes it harder to switch to Android, and it’s good for users because they can enjoy the latest iPhone without all the hassle or much of the cost involved.
An iPhone subscription would presumably work in pretty much the same way. You sign up to pay $X every month, and in return you have an iPhone of your own. Chances are the plan will also include upgrade options, on the same 12- or 24-month cycle as the Upgrade Program.
The key difference is that a subscription suggests Apple would retain ownership of the phone before, during and after the deal. If you want out, Apple gets the phone back and you have to find a brand new device. Again it’s one of those things that makes it slightly harder to leave Apple, and those obstacles add up.
A phone plan, on the other hand, has you buying equity over an extended period, and at the end that phone is yours to do whatever you want with. Trade it in, sell it on, hand it down to a family member, smash it with a sledgehammer and so on. Several phone plans, including Apple’s Upgrade Program, also have clauses that let you cancel the plan early, and still keep the phone.
At the very least that will involve paying off the remaining cost of the phone, though some providers will want more out of you. Apple’s Upgrade Program, for example, lets you cancel provided you pay the remaining phone and AppleCare+ balance. But as a result the remainder of your AppleCare+ coverage is still active.
Of course, phone plans rely on you having good credit, and I’d wager the majority of people who don’t won’t be able to spare $1,000 to buy an iPhone outright. So depending on what Apple’s approval criteria is, it’s possible that an iPhone subscription would make new iPhones available to a brand new group of customers.
But for everyone else, it feels like a worse version of a service Apple already offers.
Right now there are too many unknowns involved. Apple hasn’t commented on the original Bloomberg report and hasn’t offered any additional information or context to what we’ve heard. Without that we can’t really delve into the finer details of this hypothetical iPhone subscription.
Though this certainly doesn’t change the fact that “subscription” and “renting” are synonymous in an overwhelming number of cases. Let's just hope that if you decide to opt out, you're not left with nothing but memories.
