OK, my bad. The headline is based upon a ridiculous premise from Wayne Duggan who explained Why Apple Should Stop Selling iPhones. The key word in the argument is selling. Apple should go all in on subscriptions or rent-to-own instead.
Call it what you will– rentals, subscriptions, lease to own– but Apple is in a unique position to change the entire industry and how we acquire and use the company’s many products. Many of us use Apple’s iPhone Upgrade Program so we have a taste of the future already.
Subscriptions and rent-to-own (or, lease-to-own) are nothing new but the trend in recent years has been to forgo purchasing software and rent by the month or year. Think Adobe Creative Cloud and Microsoft Office 365. Or, even Apple Music, and definitely the iPhone Upgrade Program.
The way it works for the iPhone is simple. You get a new iPhone and pay by the month, for 24 months– no interest, but AppleCare is included, so that’s extra– and then you own the device. Or, along the way, after 12 months, you can return the iPhone to Apple, get a brand new iPhone, and start the 24 month process over again. Win. Win. Win. If you want a new iPhone each year, you get it but with no massive cash outlay. It’s rent-to-own. Or, just keep renting without paying interest. AppleCare acts like insurance.
Why not have such a subscription program or rent-to-own for other Apple products?
iPhone X with 256GB of storage rents for $56.16 per month, including AppleCare in the payment, which turns the iPhone’s $1,149 price tag into $1,348 of payments over 24 months. Either get a new iPhone after 12 months to start the 24 month agreement again, or keep it for 24 months and you own it.
How would that work for, say, a Mac or an iPad Pro or even Watch Series 3 LTE? Just make it the same way. AppleCare gets added to the total price for each product, which is divided up into 24 or perhaps 36 to 48 equal monthly payments. An entry level MacBook, priced about the same as an iPhone X and AppleCare is $249– total price tag is $1,548, and amortized out over 24 months is $64.50 per month, or at 36 months, $43 per month. A 12.9-inch iPad Pro with 256GB storage with Wi-Fi and cellular is about the same price as iPhone X on the Upgrade Program.
This is an idea whose time has come. We’re already paying for iPhones by the month, Apple Music by the month, and popular software by the month or year, so why not the rest of Apple’s products? Businesses appreciate uniformity and budget predictability, and the rest of us can get what we want from Apple without having to plunk down extra cash, or use a credit card with high interest.
The notion that Apple should stop selling iPhones, Macs, iPads, or even Watch is wrong, but rent-to-own can be very attractive.
Now, let’s see– the iMac Pro starts at $4,999, add $200 or so for AppleCare, and divide the $5,199 total by 36 monthly payments and I could own the beast for just $144 or so per month. Yes, this is an idea whose time has come.