Why Apple should launch an iPhone subscription program

Apple’s iPhone 13 Pro.

James Martin/CNET

Just like you can rent a car or subscribe to a streaming service, you may soon be able to subscribe to an iPhone. Bloomberg’s Mark Gurman recently reported Apple has an ongoing subscription plan that would allow you to pay for your iPhone through a monthly fee rather than buying it. You may also be able to swap it out for the latest model when the new iPhone launches.

Let me say up front that I think this idea could help change the tech industry. I know, the idea of ​​Apple changing the tech industry is already newsworthy. But listen to me.

Rental iPhone instead of selling them traditionally – if the idea catches on – could put a serious blow to the tech industry’s growing mountain of e-waste.

Since launching the iPhone in 2007, Apple has shipped enough smartphones to circle the earth more than a dozen times. And the gigantic success of Apple, alongside that of countless other computer and gadget makers, was expensivecounted in tons of aluminum, cobalt, copper, glass, gold, lithium, and many other raw materials that go into making the device you’re reading about right now.

A leasing program could help Apple move closer to its goal of creating a iPhone completely from recycled materials, while convincing users to update their phones every year. More subscribers would mean more revenue for Apple and potentially more iPhones with recycled materials inside.

There are other reasons why a program like this might be smart. Renting iPhones instead of selling them would give fans an easy way to upgrade to the newest model without swallowing the high flat-rate prices charged by Apple for phones like the $699. iPhone 13 Mini or $1,099 Pro Max. For Apple, an iPhone subscription deal would likely mean a big boost to two of its most important business segments: iPhone revenue and digital services like iCloud and Apple TV Plus.

However, the concept raises many questions.

We don’t know how much Apple would charge for such a program. It is therefore difficult to weigh whether it is “worth it” until there is a price. What would happen at the end of the rental period is also a mystery. (Apple did not immediately respond to CNET’s request for comment on Bloomberg’s report.)

There are also already a dizzying number of purchase options to choose from, between trade-in offers, carrier subsidies and existing Apple offers. iPhone Upgrade Program. Whatever Apple’s plan is, it would have to be significantly more affordable than these other pay-by-phone options to really appeal to consumers.

Moreover, customers are already strained by the growing number of monthly subscriptions, from streaming services to mobile carrier plans to cloud storage. I can think of 10 different digital services that I currently subscribe to right off the bat, bypassing my credit card statements. Are we all ready to add another?

An iPhone subscription could help make recycling your iPhone the norm

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Apple’s Daisy robot is designed to extract parts from recycled iPhones.

James Martin/CNET

Over the past few years, Apple has announced plans to reduce its carbon footprint. In some ways, an iPhone subscription plan feels like the next logical step. According to the report, the offer could include the ability to trade in older devices for newer models, which could give iPhone buyers another incentive to recycle their older iPhones through Apple.

Apple has made steady progress in its green ambitions over the past few years. In 2016, the company introduces Liamits first robot designed to disassemble iPhones and reuse their parts, before announcing a new robot, called Daisy, in 2018. With the iPhone 12, Apple too discontinued, including chargers and wired earphones in its iPhone packaging, to reduce waste, a move Samsung has emulated. Among Apple’s most ambitious efforts is its commit to becoming carbon neutral by 2030.

In the long term, Apple also wants to build its iPhones without having to source new materials. It is already making progress on this front. iPhone 13 is the first Apple product to use 100% certified recycled gold in the plating of the main motherboard. And Apple has just announced its intention to do the new iPhone SE using low-carbon aluminum.

Such investments show that Apple is pouring resources into the behind-the-scenes work of recycling iPhones. By launching an iPhone subscription plan, Apple could also make its green initiatives a more crucial part of the iPhone shopping experience. Apple has been publicly promote its trade-in offers and the iPhone Upgrade Program for years, but a subscription service would make it an integral part of Apple’s iPhone business model.

While it’s true that Apple and other retailers already offer take-back programs, global recycling rates are low. On average, only 20% of electronic waste is officially declared and correctly collected, according to a January 2019 report of the World Economic Forum and the platform to accelerate the circular economy. Much like you would trade in your car once your lease is up, this program could perhaps help make iPhone trade-ins an industry standard practice rather than just a money-saving option.

Besides potentially helping Apple reduce waste, an iPhone subscription plan could be better for your wallet. Apple, mobile carriers and retailers already offer deep trade-in discounts and monthly installment plans. But unlike those existing payment options, this new offer wouldn’t spread the cost of the device over 12 or 24 months, reports Bloomberg.

Instead, customers would pay a fixed amount that would vary by device. That means a subscription service could end up being cheaper than current plans if buyers don’t have to cover the full cost of the device. But again, we don’t know for sure, as this is based on Bloomberg’s report rather than official word from Apple.

The iPhone 13 Pro costs $999, or about $27 or $41 per month, depending on whether you accept a 24-month or 36-month commitment through Apple or wireless carriers. At the cheaper end of the spectrum is the older iPhone 11, which typically starts at $499, or around $14 per month. Apple, carriers, and retailers typically offer discounts for trade-ins or signing up for new service plans.

Apple also offers a iPhone Upgrade Plan, which allows users to get a new iPhone every year after covering the cost of the device in 12 monthly payments. It starts at $35.33 per month and includes AppleCare Plus coverage.

There are obviously other benefits for Apple too. The iPhone is Apple’s biggest source of revenue, so any new offerings that can spur iPhone growth will be viewed favorably by Wall Street. Finding new ways to encourage iPhone upgrades is also especially important now that people have been keep older phones for longer periods.

More options are not always a good thing

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Carriers offer many great discounts and trade-in deals for those looking to upgrade their phone.

Sarah Tew/CNET

While subscribing to your iPhone monthly has the potential to be better for the environment and more cost-effective, it can also complicate matters. With so many upgrade options available, it can be hard to tell if subscribing to your iPhone really is the best deal.

Carriers are already offering aggressive trade-in offers, especially around iPhone launch season, to attract new customers and retain existing subscribers. Such bargains were a big focus at the launch of Apple’s iPhone 13, with carriers like AT&T and Verizon offering to cover the base cost of some models of Apple’s latest iPhone. However, these discounts often require customers to trade in their old phone and subscribe to the correct plan.

If Apple introduces a compelling iPhone subscription contract, it wouldn’t be surprising to see carriers working with Apple or launching new ways to compete. As a customer, that may mean more research and fine print to wade through to find the most affordable option. (But don’t worry, if Apple launches an iPhone subscription, CNET will do that research for you.)

And as mentioned, there is the question of whether people are already overwhelmed by the number of subscription services available today. A Deloitte report which surveyed 2,009 US consumers in February 2021 found that 53% of respondents were frustrated with the number of services they had to subscribe to to access the content they wanted. These customers may not want to start subscribing to their iPhone either.

And despite Apple’s progress on its green initiatives, such moves come after years of criticism. on repairability of its iPhones and other products. The business is just coming introduce a programin November, which allows gadget owners to order components from Apple to repair their own devices.

There are many questions that need to be answered. We have no idea how much a service like this will cost, or even if it will ever launch. But it would give Apple a chance to prove just how important reusing iPhones has become — not just the process of building iPhones, but also selling them.

Corrigendum, March 29: An earlier version of this story was unclear whether the Deloitte report was quoted. The report refers to a survey carried out in February 2021.

About Irene J. O'Donnell

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