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Apple mulls iPhone subscription

Customers queue outside an Apple store to get their hands on the new iPhone XR in Shanghai on October 26, 2018. STR/AFP via Getty Images

If your heart beats only for Apple products, then the days of lining up for new product releases could be over.

Apple is reportedly considering offering iPhone subscriptions to customers, meaning Apple could shift from receiving mainly transactional revenue to recurring revenue, while also keeping impatient consumers happy.

It’s been anticipated by investors for years, with Goldman Sachs analyst Simona Jankowski commenting on the possibility in a note to clients.

“We think Apple should launch a subscription bundle as a way to reinforce iPhone loyalty and leverage it into content,” she said.

“This strategy would help Apple fend off smartphone commoditisation and position it well vs. Amazon and Alphabet as content shifts to streaming.

“In our view, Apple needs to invest with urgency and scale in a tightly integrated content strategy.”

And now, comments Apple CEO Tim Cook have also fueled suspicions.

Speaking recently, he said that Apple considers hardware-as-a-service as growth area.

″In terms of hardware-as-a-service or as a bundle, if you will, there are customers today that essentially view the hardware like that because they’re on upgrade plans and so forth,” he said.

“So to some degree that exists today.

“My perspective is that will grow in the future to larger numbers. It will grow disproportionately,” he added.

Cook said Apple is aware about demand for subscription basis and is “committed to make that easier to do than perhaps it is today”.

It comes as consumers increasingly move to subscription-based spending on entertainment like streaming services and food delivery services like HelloFresh and Marley Spoon.

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