Why iPhone-as-a-service may make sense as tariffs bite Apple – Computerworld

People are ready to accept it

It’s not as if we’re not ready for such a service. Even back in 2022, CIRP Partner and Co-Founder Josh Lowitz said: “Based on current consumer behavior, iPhone users are primed to adopt a subscription service that provides an iPhone bundled with useful apps. Almost half iPhone owners already finance their iPhone purchase, paying monthly for a new phone. And about one-third trade-in their old phone when they buy a new one. So, a significant portion of the user base is accustomed to never owning a phone, instead basically leasing it.”

Apple also gains. In this case, it benefits from potentially lower, but at least recurring, income upon which to balance its stock. And it benefits from the fact that at the end of the subscription period (or during it if the consumer cannot maintain payments), the devices will be returned for refurbishment, resale/let, and/or recycling.

This also opens up the highly lucrative second-user iPhone market, which is an income stream Apple hasn’t yet fully explored. The iPhone is the most widely sold smartphone on the second-user market and holds its value the longest; company management is said to have been eyeing whether they can extract more from those sales.