Combined Hardware-Software Subscription Bundles a Logical Step for Apple, Analysts Argue

Apple is positioning itself to launch a combined hardware and software subscription, according to Loup Ventures analysts.

Apple One Apps Feature 2

The report makes a compelling argument, based on a range of industry trends, aggregated data, and existing infrastructure, that Apple is in a prime position to launch an all-in-one hardware and software subscription.

Similar to the iPhone upgrade program, we believe, over time, Apple's delightful hardware trade-in experience for Mac, iPad, and Watch will evolve into hardware subscription offerings for these devices. Eventually, we envision the company merging its services offerings, alongside hardware subscriptions, to create a 360° bundle. Think of this as paying a monthly fee to Apple for most of your tech needs.

The conclusion is partly based upon industry macro trends, including "an ongoing digital transformation" and "changing consumer buying preferences." This is supported by the fact that Apple is said to be the only company that could create such a subscription, given its service and maintenance logistics, as well as its unique hardware and software integration.

Offering a combined hardware and software subscription would allow Apple to markedly increase revenue and earnings visibility, and in turn, expand its earnings multiple. Loup Ventures also demonstrates the likelihood of significant consumer demand for such a subscription, as well as corporate viability.

The ‌iPhone‌ trade-in program, AppleCare, Apple One, and the ‌iPhone‌ Upgrade Program are said to be key building blocks in the journey toward launching a combined hardware and software subscription. The entire internal infrastructure for such a scheme appears to already be in place through these services.

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.

The report also notes that rivals such as Google and Samsung will struggle to compete with a potential all-in-one Apple subscription. Google, for example, suffers from fast declines in device value, making the trade-in market much less commercially feasible. Samsung, on the other hand, has poor hardware and software integration, so while it could offer hardware subscriptions, it would be unable to create an attractive package including integrated software services.

See the full report by Loup Ventures for more information.

Top Rated Comments

Mansu944 Avatar
18 weeks ago
Welcome to the world where you own nothing....merely rent it.
Score: 27 Votes (Like | Disagree)
-BigMac- Avatar
18 weeks ago
Keen!
When i buy upgrades, I sell my old stuff anyway.
Removing that re-sale hastle means removing the most annoying part of the whole cycle.

Where do i sign up?!
Score: 14 Votes (Like | Disagree)
davidjschloss Avatar
18 weeks ago

Welcome to the world where you own nothing....merely rent it.
The annual apple iPhone upgrade program is fully bought out in 24 months. You're essentially getting a 0% APR loan for 24 months (albeit with the cost of that 0% baked in). I'm not sure how this is only renting?

This is financially the same as a mortgage or a car loan. You're paying the bank to spread out the payments, but at the end the product is yours.
Score: 12 Votes (Like | Disagree)
adamjackson Avatar
18 weeks ago

Welcome to the world where you own nothing....merely rent it.
I'm a crumudgeon through and through but that's been life for a few hundred years. try not paying your property tax and see how long you "own" your land.
Score: 12 Votes (Like | Disagree)
LarrySW Avatar
18 weeks ago
I would like a program like this for Macs and iPads. I know some people get hung up on not "owning" a product with these programs, but you would in all likelihood have the option of buying it outright like you can currently do with the phone.
Score: 8 Votes (Like | Disagree)
vipergts2207 Avatar
18 weeks ago
I will never subscribe to hardware, just like I’ll never lease a car.
Score: 7 Votes (Like | Disagree)

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