With considerable fanfare, last week Apple announced a new “purchase” program for many of its devices. In partnership with buy-now-pay-later provider Klarna, customers can now lease an iPhone, iPad, Mac computer, or Apple Watch.
Since Apple customers will not “own” their device, they don’t really “purchase” it. “Obtain” may be the right word. It suggests that you receive, possess, and use the device, but don’t own it in the legal sense.
Most observers hailed the new program as reinventing how customers obtain Apple products. Paying a monthly amount to use a device, rather than the full price, could completely change the upgrade cycle for devices, and the accessories and services that Apple customers buy. It also provides a steady stream of used devices for Apple’s global refurbished device business.
The way the leases are structured is very interesting, according to Consumer Intelligence Research Partners (CIRP). It really just accelerates upgrade eligibility, rather than lowering monthly expense. More on that below.
Since iPhones account for an overwhelming part of Apple’s business, we are going to start with them. In its current iteration, Apple Upgrade may not have a significant impact on how most US consumers acquire their iPhones.
You see, Apple Upgrade is available only in the US, and only for devices purchased directly from Apple – from a physical Apple Store, the Apple.com website, or the Apple Store app. And Apple sells a relatively small proportion of iPhones through those proprietary retail channels.
In the past year, about three-quarters of Apple iPhones sold in the US were through carrier retail operations, according to CIPR. Only 14% of customers bought an iPhone directly from Apple, with the balance going to a mass merchant like Walmart or Best Buy. These shares have remained steady for the past several years.
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Article provided with permission from AppleWorld.Today
