Apple in Talks With Goldman Sachs Over Potential iPhone Buyer Finance Options

Apple is in talks with its investment bank Goldman Sachs about the possibility of offering customers financial loans when buying Apple products, according to a report by the Wall Street Journal on Wednesday.

The Wall Street firm is in talks to offer financing to shoppers buying phones, watches and other gadgets from Apple, people familiar with the matter said. Customers purchasing a $1,000 iPhone X could take out a loan from Goldman instead of charging it to credit cards that often carry high interest rates.

Talks between Apple and Goldman Sachs remain at an early stage and could still fall apart, according to WSJ. Both the tech giant and the investment bank declined to comment for the report.

Part of Goldman's discussions with Apple are said to involve taking over some form of Apple's iPhone upgrade program, which is designed for users who want to have the newest iPhone every year and comes with AppleCare+ included.

Those who sign up for the program in its current form can trade-in their existing iPhone for a new model after 12 monthly installments are made, starting a new cycle of the program each year. Apple started the program in September 2015 with the help of Citizens Financial Group, who finance the zero-interest loans for iPhone upgrades and higher-interest options for other device purchases. The program was introduced around the same time that wireless providers began reducing buyer subsidies for iPhones.

Goldman Sachs is said to view the potential financing deal with Apple as a way of growing its new consumer bank, as it looks beyond corporate clients to more fully embrace retail banking and consumer lending. Two years ago the investment firm launched Marcus, an online lender that helps people refinance credit-card debt, while the bank is also building a "point-of-sale" financing business that will offer loans to shoppers at checkout, according to people familiar with the firm who spoke to WSJ.

Related Roundup: iPhone XS

Tags: Goldman Sachs, iPhone Upgrade Program

Buyer's Guide: iPhone XS (Neutral)

Top Rated Comments

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Abazigal

12 months ago

In a world war we have the option to take a loan out for a phone. No thanks. I usually purchase my iPhones out right, that way I don't have to deal with carrier restrictions and No monthly payments.

I agree. If I need to take a loan to buy a phone, then it’s probably not a phone I should be buying in the first place.

Rating: 15 Votes

69Mustang

12 months ago

Same logic with a car or a house? Just because you don’t have the money upfront doesn’t meant you can’t afford it.

It's not the same logic with a car or house. Financing a place to live or a vehicle to get from A to B is not on par with financing commodity electronics. That's an absurd comparison.

Rating: 13 Votes

JonKelley

12 months ago

Apple has learned from the auto sales industry when you change the conversation to monthly payments instead of the total price, many consumers don’t seem care about the high price. Then, once the $1000 phone becomes an $1199 phone, Cook can say it’s only a few premium coffees a week more again. From a business standpoint I get it, but as a paid-in-full type of customer that tactic doesn’t work for me. I hope customers keep holding onto their phones longer in response.

Rating: 11 Votes

Naaaaak

12 months ago

If you can’t afford an iPhone on your credit card, you have no business going into business with a predator like GS.

Rating: 9 Votes

radiology

12 months ago

If you need a loan to buy a $1000 phone, you shouldn’t be buying that phone.

Rating: 7 Votes

Relentless Power

12 months ago

In world of when we have the option to take a loan out for a phone. No thanks. I usually purchase my iPhones out right, that way I don't have to deal with carrier restrictions and No monthly payments.

Rating: 6 Votes

neuropsychguy

12 months ago

I will always finance if it's a 0% interest loan (e.g., through carriers) and if the product is something I could pay cash for. I'd rather keep the money in an account earning interest than having to pay it off up front.

Rating: 5 Votes

gatearray

12 months ago

Good old Goldman Sachs, those white-collar criminal insiders who engineered the financial crisis of 2008, ruling elite scumbags is what they are. Birds of a feather flock together.

Rating: 5 Votes

BootsWalking

12 months ago

Vampire Squid phone.

Rating: 5 Votes

NachoGrande

12 months ago

Insanity.
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Same logic with a car or a house? Just because you don’t have the money upfront doesn’t meant you can’t afford it.

A house is a deduction and an asset. We're talking about 1,000 dollars not 40k or 500k for a house

Rating: 5 Votes

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