A few days ago, Christopher Mims of the Wall Street Journal wrote a very interesting article that poses an even more interesting question- Would you sign up for a yearly subscription for Apple hardware?
His premise is that such a service would be the best move for Apple going forward. Rather than depending on a string of hardware hits scattered throughout the year to keep profits rolling in, thereby slowly feeding Apple’s growing Services business, he proposes that a subscription package would smooth out the peaks and valleys and give Apple a more reliable and predictable revenue stream. It certainly makes sense on the surface. With the smartphone market saturated, the tablet market somewhere between steady and shrinking, and uncertainty as to how the wearables market will ultimately play out, Services certainly looks like the safer horse to back.
In much the same way that Amazon uses the hooks of Prime to get people to buy more stuff from them, an Apple hardware subscription program could potentially light a huge fire under their various Services. You can already see a bit of this with the iPhone Upgrade Program, which has the added bonus of AppleCare+ bundled in at a reduced price and now gives subscribers a tiny bit of a jump on the rest of the preorder line. Add in more hardware and include some base-level versions of Services like iCloud and Apple Music in the deal, and Apple would really have something.
Giving Apple fans direct access to more of their hardware in a way that is easy to budget for would likely be a big hit. In turn, more users who feel like they are a saving some money in the deal will be more likely to spend a little of it to upgrade Services that might be included, or add in others that are optional. You have a feedback loop that works in the opposite direction right now, with hardware sales and ecosystem adoption feeding Apple’s Services. By making Services the priority and hardware the hook, Apple could stand to make just as much, if not more money, and do so in a steady and more predictable way. Apple shareholders and analysts would LOVE this.
So if Apple rolled out a program tomorrow that included a yearly updated iPhone, iPad and Apple Watch for a flat, monthly fee, would you buy it? As for myself, I am already using the iPhone Upgrade Plan, and when the Apple Watch went Cellular last year, I actually suggested that Apple set up a separate Upgrade Plan for it. However, Mims’ suggestion in the article is far more comprehensive, and would really encourage and even reward users for going deeper into Apple’s ecosystem.
I can say that thinking about how this would work and whether I would do it is very interesting. I am pretty sure I would jump at the chance to get all of Apple’s mobile hardware delivered this way. I don’t think I would even hesitate to go that route. However, I could also see a program like this getting me to consider going further. I have never been a Mac user, but the right price just might turn me, at least when it comes to home computing.
Even writing for an Apple site, I have never strongly considered buying a Mac for what they cost before, so the fact that this program got me to consider that as a potential benefit is intriguing. I think there are a LOT of Apple users who aren’t fully invested into the Apple ecosystem who could get hooked in much the same way. Think about that. What is the next step? The more Apple hardware that you have, the more other Apple products outside of the subscription service you would be likely to buy. The more Apple hardware that you have, the more you are encouraged to subscribe to even more of their Services. That could be a powerful feedback loop.
What about you? Would you sign up for such a program if Apple rolled it out? If so, what hardware would you want to see included beyond the iPhone? What Services should be bundled with such a subscription, and at what levels? If you are on the fence, is there something that would tip the scales in favor of you getting on board? Let me know in the Comments section below, on Flipboard, on our Facebook page, or on Twitter @iPadInsightBlog.