Apple (AAPL) is preparing a hardware subscription service for its iPhones that could launch by the end of this year.
The service would allow customers to buy an iPhone through monthly payments, similar to how users currently subscribe to iCloud, according to multiple media reports.
Selling its hardware as a subscription would boost recurring revenue at the consumer electronics giant.
Analysts have argued that increasing predictable subscription revenue could prompt investors to value Apple’s stock more highly.
Apple already offers several methods to pay for iPhones, including the iPhone Upgrade Program, which bundles iPhones with a warranty and free upgrades for a monthly fee, and financing with the Apple Card.
Apple chief executive officer (CEO) Tim Cook has told investors to closely watch its services business, which reported $68.4 billion U.S. in sales in 2021, growing 27%. Apple’s services business currently includes warranties, services such as iCloud and Apple Music, and sales from Apple’s App Store.
Apple’s iPhone business reported nearly $192 billion U.S. in sales over the same period. The company’s stock has declined 4% year to date and closed trading yesterday (March 24) at $174.07 U.S. per share.
