Over the past few years we’ve seen a growing number of companies move to subscription models for things you used to be able to pay just once for. Want to use Adobe Audition or Premiere? You need a subscription and if you stop paying, you lose access. QuickBooks recently went the same way. And Microsoft would really like you to pay for Microsoft 365 rather than buying Office outright, although at least that’s still an option (for now).

Now rumor has it that Apple could take the same approach with hardware: Bloomberg reports that the company is developing a hardware subscription plan that would let you pay a monthly fee for devices like iPhones.

There are a few advantages to this idea. Rather than spending close to a thousand dollars on the latest iPhone, you could spend a lot less up front and just keep paying over time to continue using your phone. That could be a good option for folks who don’t have $1,000 to spare at the moment, but who can afford monthly payments.

Like software subscriptions, this sort of service could also have another advantage: you’d get to keep your gear up to date, swapping out devices like iPhones, iPads, or Apple Watches when new models arrive. It’s unclear if that means you’d be able to upgrade annually (Apple releases new versions of most of those items every year), or if Apple would take a page out of the wireless carrier playbook and offer device upgrades every 2-3 years.

Apple is also said to be considering adding hardware options to its existing Apple One bundles, which currently allow you to combine existing subscriptions for music and/or video streaming, gaming, news, online storage, or fitness.

Anyway, I have a feeling the idea’s not going to be popular with folks who prefer to own the products they pay for rather than renting them, and those who feel like they’re already being asked to pay for too many other subscriptions. But maybe I’m wrong, so let’s have a poll:

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  1. I wouldn’t, but I fear this sort of offer will be hugely popular with those who “need” to have the latest model without having to deal with the big price tag – everything is rentable these days, most make no sense from a financial or footprint point of view, but let’s agree many just want to have the latest thing regardless.

  2. Would you pay a subscription to always have the latest iPhone?

    Nope. For a whole host of reasons:

    e-waste
    better open source equivalent UIs
    design / use maturity
    (and what data does Apple harvest?)

    I want to own, and have contol over the hadware I use.

  3. Subscription is probably the wrong way to think about this idea. As noted elsewhere, mobile carriers already have this covered.

    What Apple is doing is create a reliable and predictable price for 1-year old phones, and an easy trade-in to persuade you to upgrade. They are creating a reliable second hand market, and a very large number of 1-year old phones to process.

    Just like care leasing, the second hand market is major determinant on new and leasing prices.

    1. Apple <a href=”https://www.apple.com/shop/iphone/iphone-upgrade-program>already offers exactly what you describe, which is not what this Bloomberg article is about. In particular, they’re talking about a monthly subscription rather than an annual one, and the language would suggest it’s hanging over your head a bit more than the iphone upgrade program (I’d imagine you could just…keep the device you have at any time with that).

  4. I am willing to pay in installments if they are interest free but I prefer to pay upfront (my income is variable and I prefer to eliminate commitments to future payments when possible). I refuse to pay installments with interest since it increases the price significantly (and they are pricey enough already for the most part).

    I WOULD be willing for a streaming solution a la GeForce now to do the heavy lifting if it was a weaker phone as long as it was reasonably priced (I have the founder’s edition pricing for GeForce now and it’s definitely cheaper than upgrading a gaming laptop regularly.

    But as for the actual hardware, I want to be able to keep it, modify it, use it as a backup. The only way I would opt for a subscription service (which I generally hate and refuse to use when possible) is
    1) it guaranteed I always had a working device and this means it would provide me with a decent replacement if something happened to the previous one (obviously it would require returning what remained of the previous one in case of accident or handing over an appropriate police report in case of theft or something along those lines
    2) provided me with more than adequate cloud storage to back up EVERYTHING.

    3) the pricing was reasonable and comparable to buying a new one X amount of time or if they did guarantee a replacement a little more as a built-in insurance (but guaranteed guaranteed, not if they try to worm their way out regularly)

  5. My OnePlus 5 is getting close to 5 years old at this point. It was roughly $500 when I bought it. It was a pretty great value at the time. That turns into roughly $100 per year. Would a cell phone subscription service be that price or cheaper? If so, that might be worth it, especially if it included an upgraded phone every year.

    Of course, if I have to give the phone back after 5 years (or whatever) then I can’t hand it down to my kids who would get maybe another couple of years use out of it. So I guess that changes the economics a little bit too.

    I answered “no” to the poll, but maybe my real answer is that it depends on the price? Though if we’re talking Apple, I can only assume the price will be higher than I want to pay.

  6. I thought Apple started offering an iPhone subscription service a couple of years ago?

    At any rate, I don’t want it for myself, but I could imagine getting it for my wife.

  7. “That could be a good option for folks who don’t have $1,000 to spare at the moment, but who can afford monthly payments.”
    Something tells me more people think they fall into this category than actually do. If you don’t have a spare $1000 to spend on a new iPhone every year, you probably shouldn’t be buying such an expensive phone. Then again many iPhone users would NEVER consider owning anything but the latest iPhone, and buying a cheaper iPhone SE defeats the purpose as you don’t get to show off your shiny new expensive device and feel rich, even if you are not. At the end of the day I think Apple knows most of their users will give up just about every other material possession they own before they give up their expensive new iPhones so I suspect a service like this would probably be far more successful than it reasonably should be. People will sign up for monthly subscriptions they can’t really afford, leading to them not having $1000 for a new product they want, leading to signing up for a subscription they can’t really afford, and the cycle repeats. I can’t help but think about payday loans here. I have to wonder what these kinds of consumers have for savings and retirement plans. Sadly, I would guess not much.

    1. Eh, you could make the same argument for cars, houses, college education, and a million other things that we’ve gotten used to paying for monthly because they’re just too darn expensive for most people to pay for out outright given their income and/or savings levels.

      Buying a $1,000 phone (or even a $400 one) outright is probably just as out of reach for many folks’ budgets. It might be a lot easier to pay $20 or $30 each month rather than setting that money aside until you’ve got enough to buy a new phone, especially if you need a new one right now.

      1. Cars, houses, and college educations are all, to me anyways, things that it is reasonable for the average person to not be able to afford outright. I guess ultimately I’m just shocked so many people are willing to buy a smartphone so expensive they can only afford it by financing it. Especially considering the statistics I constantly see of, American’s anyways, and the amounts they have in savings and retirement. But to each their own. It’s their money they are spending, not mine, so more power to them.
        Love the site, visit it quite literally just about every day!

        1. I mean, I’m with you in that I wish we weren’t moving to a subscription/rental-first world, and deals like these rarely end up being better in the long run for the person who’s paying.

          I just acknowledge that not everyone can afford to buy things outright, and phones have become essential goods over the past decade. Just because I can afford to buy a nice mid-range model every few years by paying full price doesn’t mean everyone can.

          That said, it’s unclear whether Apple will position its new service as an “affordable” alternative to paying full price or as something else.

          1. You make good points, and I do not disagree. I guess maybe I’m just a stingy old fart who has seen far too many people blow their budgets to bits to buy a phone they can’t realistically afford and are sick of in 1-2 years anyways. And personally I think advertising and peer pressure play a huge roll in this decision for many people. But, like you said, they same is also true for just about everything we spend our money on. Lots of people buy more house or car than they can afford to so might as well add a phone to that list.

          2. It’s not like people haven’t financed phones before though. You can just amortize the payment by adding some extra onto the phone bill every month.

        2. iPhone is known as ‘kidney phone’ in China cause a 16-year-old boy sold his kidney to buy a iPhone 4.

      2. college education and houses are things which in theory help you for the rest of your life and you can actually pay off eventually,

        Cars most of the time you get to keep eventually after paying them off and can potentially last decades on the individual and the quality, but even if not, definitely more than 2 years.

        I’m fine with renting a home, studies show that buying a home is not the best decision for everybody (for some yes, others no), but they have the choice and rental prices are in theory proportionate to purchase prices (in theory about 1% of the property’s value) so again, it would take a lot longer than 2 years to cover the cost. The only saving argument there is the constant upgrades (if they are worth it). Die reductions will eventually hit a limit, and there’s a question of how much processing power the average user needs. The same thing that happens with desktop and laptop computers.

        And while I get the whole “need one right now” thing, I seriously doubt Apple will charge 20 or 30 dollars a month and let’s not forget you can actually buy a functional (nearly disposable) phone for for 50 or 100 bucks if you go with some of the less known Chinese manufacturers on sites like gearbest. And let’s face it, if you are in that low a tax bracket, I doubt the Chinese government has any interest in spying on you (just in case you care about that) and it can tide you over till you can afford something better.

        In Mexico there are stores which offer financing and charge you weekly payments (to make them seem smaller and more manageable) but end up charging you twice or three times the product’s upfront price. It’s really abusive and not worth it. So yeah, when using financing look at the total cost and decide whether the convenience is worth it.

    1. Couldn’t agree more. Still rocking my Pixel 3XL. Can’t justify replacing it. It has everything I want or need. Fast processor, great camera, great screen, latest version of Android (unfortunately it did just get it’s last major OS update so the clock is ticking on this one now). As far as I’m concerned the latest Pixel phones have VERY little advantage over my 3XL other than OS updates for a few more years starting now. As long as the battery keeps hanging tough I will probably have this phone for at least another year or so. At that point it will be over 4 years old and I will finally be ready to “upgrade” to something newer.

  8. Cell carriers had been offering subscription plans like that a while ago.
    I’d never sign up for one.
    Unless you’re playing competitive games or are attempting to replace a laptop and every camera you’ve ever owned, there’s really no reason to pay exorbitant amounts of money for flagships.
    Maybe they think they can start getting away with it again with carriers changing the cellular standards every five years and knocking hundreds of devices off their whitelists.