Mark Gurman in his latest “Power On” column on Sunday said that Apple Inc. is developing iPhone hardware subscription service from its large user base to extract more income.
Currently, only die-hard Apple fans buy new iPhones every year. Most consumers will only upgrade their phones when they feel it is necessary, such as with a cracked screen. The average iPhone user upgrades every three years, which is less frequent than it was about a decade ago.
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According to market research firm Counterpoint Research, the average selling price of an iPhone is about $825, which means that Apple can only earn more than $800 from the average iPhone user every three years.
That’s why Apple is working on a hardware subscription service. With this service, Apple can increase that $800 to more than $1,000 and put old phones back on the used market.
Gurman said that the current starting prices of the iPhone 13, Pro, and Pro Max are $799, $999, and $1,099 respectively. If calculated according to the subscription service, then the three models will be priced at the same price after three years. at $1260, $1620 and $1800.
This is obviously just a rough calculation, but suddenly Apple is able to generate more revenue from each consumer. It could also generate more revenue if Apple bundled the program with its high-margin Apple One digital service, AppleCare.
