Apple is moving towards 360° hardware and software bundle – Report

With complete hardware, software, services, and maintenance logistics ecosystem, tech analysts at LoupVenture believe that Apple is moving towards a new 360 monthly subscription bundle. Gene Munster and David Stokman believe that currently, digital transformation and changing consumer buying preferences will pave the way for new hardware subscriptions along with its existing services bundle which means that users will be able to frequently upgrade Mac, Apple Watch, iPad, and other products like the iPhone.

Recently, the company launched Apple One bundle which offers Apple Music, Apple Tv+, Apple News, iCloud and other services in three monthly subscription plans starting from $14.99. Thus, based on the Cupertino tech giant’s existing subscription base, analysts estimate that the new step for the company is to introduce hardware subscriptions as well.

Data justifies a new 360° hardware and software bundle by Apple

The prevailing COVID-19 pandemic will eventually come to an end but the increase in digital dependence during the health crisis is expected to last longer. Munster and Stokman state that work from home is likely to increase by 3x and educators’ reliability on tech will also increase with more a quick implementation of work from home. Therefore, Apple is equipped to facilitate the higher dependence on devices, services, and maintenance. They wrote:

Two Apple data points highlight the recent surge in the digital transformation. First, Mac revenue grew at 29% y/y in the Sep-20, up from 22% in the Jun-20 quarter. These compare to the nine quarters before the pandemic, in which growth was flat on average. The September Mac results were particularly impressive, given in the month of June, the company announced new Macs would be coming in the December quarter.

Similar data points exist for the iPad business, which reported revenue growth of 46% and 31% in the same two quarters, compared to on average 4% growth in the nine quarters preceding the pandemic. Going forward, we believe Mac and iPad growth rates will stabilize around 10% over the next few years, representing a step up from flattish growth pre-pandemic.

Exploring the shift in consumer buying preferences, analysts say that the new generation, especially millennials, have a “rent vs. buy” mentality and Apple provides them a middle option between rent and buy, to purchase products in installments.

Apple Card holders have an option to buy hardware with a 12-24 month interest free payment option. This is a compelling offer to defer the devices upfront cost, and the hardware subscription plan offers greater value to the consumer. Using an iPhone 12 as a case study comparing purchasing a phone with Apple Card installments vs. the iPhone Upgrade Program reveals two advantages of the Upgrade Program.

The biggest benefit is that the consumer gets a new phone every year, and Apple Care (about $6 per month) is included in the monthly price.

And to seal the deal, the company’s well-established service and maintenance system would allow Apple to expand its hardware subscription. Cupertino tech giant’s streamlined buyer and sellers exchange rate by trade-in program and iPhone upgrade program is prerequisite for availability of hardware on affordable monthly installments in the future.

For hardware subscriptions and ultimately a 360° bundle to gain wide adoption, the product family must work seamlessly together, the infrastructure to service and maintain those products must exist, and the products must hold their value over time. Apple is the only company that can bring all three of those together.

Read Also:

About the Author

Snapchatter and Apple fangirl, covers everything about social media, app reviews and Apple news.