In 2015, Apple decided to shake things up a bit in the cell phone market. They launched an invasion into the territory of cell service providers by offering the iPhone Upgrade Program. The program is similar to the installment plans that all of the major US cell carriers started offering a year or two before, but a couple of major distinguishing factors. First off, the phones come unlocked, and can be used with any of the major carriers. Second, the phones arrive covered by AppleCare+, which offers up to two reasonably priced repairs per year for accidental damage with small deductibles.
I ditched AT&T Next and signed up for the iPhone Replacement Program when it was launched alongside the iPhone 6S. The inclusion of AppleCare+ for just a few dollars per month more than I was already paying, along with the fact that I didn’t have to change carriers or plans, made it a no-brainer decision for me. The fact that Apple also offered the ability to upgrade yearly with trade-in was also a big factor for me. However, if upgrading yearly isn’t a big deal or you prefer to own your phone outright, paying it off over two years will do the trick.
The iPhone Upgrade Program isn’t just a win for users. Apple also gets a lot out of the arrangement, as well. First off, they can make more money per phone in installment payments than what they will get selling wholesale to carriers. Second, and even more importantly, the devices that are returned to Apple give them a much greater amount of control over the second hand market for iPhones. They can refurbish these phones and sell them via the Apple Outlet, use them as warranty replacement devices, or sell them at less expensive prices in emerging markets.
The iPhone Upgrade Program is a great option for many like myself, but it still has its flaws. Chief among them is the fact that, since you are signing up for a 0% interest loan, you had to go through a credit check. This makes the signup process more complicated, and also limits who can qualify. This also complicates the upgrade process, as you have to close out the existing agreement and start a new one from scratch.
Still, despite the small annoyances, I have still found the iPhone Upgrade Program to be superior to the carrier alternatives. With the success of this program, I would love to see Apple extend it to include additional devices. In my opinion, adding an Apple Watch Upgrade Program is the next logical step. Why? Let’s take a look.
No Installments Necessary
One thing I discovered recently is that AT&T is selling the Apple Watch and other wearables on an installment basis, which can be added to your cell phone bill. It’s smart, as this tactic opens up new sales opportunities for them. However, since the Apple Watches have far lower retail prices than an iPhone, a payment plan isn’t an absolute necessity. By at least offering the option of paying the entire price of the Watch up front, Apple could cut out the need for a bank and streamline the signup process.
One of the biggest complaints against the Apple Watch since its release has been its lack of longevity in comparison with traditional watches. While a comparably priced mechanical watch could work for decades if cared for, an Apple Watch can only go for 2-3 years on its original battery, and it will eventually no longer be updated and compatible with new versions of watchOS.
The fact is, if you want to upgrade to each successive model today and are of typical means, you have to sell your existing Watch yourself to fund the purchase of the next one. One of the best aspects of the iPhone Upgrade Program is that you don’t have to worry about any such details. You show up, exchange your phone, and get the next one. That’s it. Even if installment payments aren’t part of the deal, knowing that you can just show up and exchange your old Watch for a set percentage off the next device just adds certainty to the process.
Keep Those Sales Figures Growing
When the Series 0 Apple Watch didn’t prove to be the next iPhone right out of the gate, many wrote it off as a flop. However, those same people tend to forget that the original iPhone didn’t exactly set the world on fire sales-wise, either. It was the 3G and 3GS that saw the iPhone go mainstream. In much the same way, the Series 1 and 2 Apple Watches are selling very well now. While Apple isn’t giving direct sales numbers, they have let us know that sales numbers are headed in the right direction.
An Upgrade Plan would help to bolster those sales numbers, and keep them growing. If users know that their investment will be rewarded with built-in upgrades at set prices, they will be more likely to get off the fence and make that first Watch purchase. Having AppleCare+ and the future trade-in value veritably locked in up front will be strong selling points. And if Apple were to go the installment route, then it would be possible to set the system up to allow for the same free yearly upgrades with trade-in that the iPhone plan offers.
I’m sure some would say that an Upgrade Plan program for the iPad or the Mac would make more sense. However, the low price and swift upgrade cycle for the Watch make it a perfect candidate. This device is close enough to impulse purchase pricing territory that giving buyers a little extra incentive can push more over the edge. Also, the default inclusion of AppleCare+ would also set minds at ease, as the Watch is typically exposed to more wear and tear than other device by nature of where it is worn. I know mine has takes several licks and kept on working. However, the fact that I purchased AppleCare+ with it does give me a lot of extra confidence that, no matter what, I’ll be taken care of.
Is there anyone else who has signed jump for the iPhone Replacement Plan over the last two years? What has your experience been like? What do you think of the idea of an Apple Watch Upgrade Plan? Let me know in the Comments section below, on Flipboard, on our Facebook page, or on Twitter @iPadInsightBlog.