4 ms·

Apple is going to make bank by turning into a bank. The installment plan with free upgrades each year is brilliant. The user lock-in is going to be unsurpassed

Apple is going to make bank by turning into a bank. The installment plan with free upgrades each year is brilliant. The user lock-in is going to be unsurpassed and no competing phone maker has the mountains of cash required to match it.

deleted 11y ago
[deleted]
kozukumi 11y ago
Yeah that was the biggest thing for me too. We knew what was coming with the iPhone, Apple TV and iPad Pro. That upgrade program is going to be a big thing in my opinion. One thing I wasn't sure about though was do you own the phone or are you just leasing it? When you upgrade after a year do you have to return your old phone?
- amazon_not 11y ago
  I can't image them letting you keep the old phone, as you haven't paid full price for it in a year. EDIT: "Just trade in your current iPhone for a new one, and your new program begins." Source: http://www.apple.com/shop/iphone/iphone-upgrade-program http://www.apple.com/shop/iphone/iphone-upgrade-program
- eastbayjake 11y ago
  I'm sure it will be turned back in, refurbished, and resold in developing markets
- knd775 11y ago
  If you upgrade after a year, that seems probable. After the full 24 months, I believe that it would be yours. Don't quote me on this, though.
  - jonhohle 11y ago
    At a $120 premium over a carrier's installment plan.
    - sehr 11y ago
      AppleCare+
    - Watabou 11y ago
      How so? You get AppleCare+, which is $99, and if you compare that with AT&T, it's cheaper per month, unless I'm missing something. It's also unlocked so you can freely switch carriers. I think there's a lot of people that will be enticed with this.
    - chipx86 11y ago
      You gain AppleCare+ as a benefit, bringing the price a lot closer. It's also unlocked, which could be nice for some people. Here's the big difference, though, at least with AT&T's Next: With Next, the "how often can you upgrade" and "how long do you have to pay" are highly mismatched. The most frequent upgrade plan is once very 12 months ("AT&T Next 12"). To get this, I have to commit to paying 20 months (or ~3.33 years). If I want to upgrade two years in a row, I've committed to paying 40 months (2 terms of the plan). That at least gets me 3 upgrades in that term. If I want to go for a 4th upgrade, we're now at an overall committed payment term of 5 years. That's fine if you're doing this long-term, but Apple's appears much simpler: You pay for 2 years. In that time, you get 2 phones. Verizon's program lets you upgrade "any time" you want, but only once you've paid off the cost of the new phone. Unless you pay a chunk of change early, this means one upgrade every 2 years, just like a contract, compared to Apple's once-a-year. What I'm not sure about with Apple's is whether you can end your 2 year plan with a second phone, and then terminate and keep the phone. This is what I'd most like to know before considering this further. The Terms and Conditions page doesn't seem to be up yet.. Given that the upgrade is once every 12 months, timing also seems important. I'd imagine you'd want to activate the plan just after a new iPhone comes out, and hopefully time it so that you end the 2 years right after another new iPhone comes out, if you really want the latest-and-greatest. Overall though, it seems to be more fair compared to AT&T's Next and Verizon's Early Upgrade programs.
rsync 11y ago
Both GE and GM turned themselves into banks. It ended poorly for both of them.
dave_sullivan 11y ago
Usually not a good sign when a company known for creating innovative real-world products shifts to creating innovative financial products. Except for Berkshire Hathaway moving from textiles to being Warren Buffet's investment vehicle -- that was a good move...
- amazon_not 11y ago
  I wouldn't really call an installment plan a very innovative financial product. And it's not like they'll stop making iPhones and focus on financing. It's just a power move to dominate the phone market and cement their lock on customers.
  - rancur 11y ago
    next is iMortgage
    - easyfrag 11y ago
      probably not, this is a good dry run for car financing though
- cx201 11y ago
  That's actually how Porsche ended up in a position where it had to be 'rescued' (=bought) by Volkswagen during the last financial crisis: http://priceonomics.com/porsche-the-hedge-fund-that-also-made-cars/ http://priceonomics.com/porsche-the-hedge-fund-that-also-mad...
jwcooper 11y ago
They're not handling the financing. It appears to be going through Citizens Bank, and is an installment loan. [1] And, if you were hoping to use someone cheap like Cricket instead of Verizon, no such luck there either: "1. The iPhone Upgrade Program is available to qualified customers only with a valid U.S. personal credit card. Requires a 24-month installment loan with Citizens Bank, N.A. and iPhone activation with a national carrier — AT&T, Sprint, T-Mobile, or Verizon. " [1] http://www.apple.com/shop/iphone/iphone-upgrade-program http://www.apple.com/shop/iphone/iphone-upgrade-program

deleted 11y ago

[deleted]

kozukumi 11y ago

Yeah that was the biggest thing for me too. We knew what was coming with the iPhone, Apple TV and iPad Pro. That upgrade program is going to be a big thing in my opinion. One thing I wasn't sure about though was do you own the phone or are you just leasing it? When you upgrade after a year do you have to return your old phone?

amazon_not 11y ago
I can't image them letting you keep the old phone, as you haven't paid full price for it in a year. EDIT: "Just trade in your current iPhone for a new one, and your new program begins." Source: http://www.apple.com/shop/iphone/iphone-upgrade-program http://www.apple.com/shop/iphone/iphone-upgrade-program
eastbayjake 11y ago
I'm sure it will be turned back in, refurbished, and resold in developing markets
knd775 11y ago
If you upgrade after a year, that seems probable. After the full 24 months, I believe that it would be yours. Don't quote me on this, though.
- jonhohle 11y ago
  At a $120 premium over a carrier's installment plan.
  - sehr 11y ago
    AppleCare+
  - Watabou 11y ago
    How so? You get AppleCare+, which is $99, and if you compare that with AT&T, it's cheaper per month, unless I'm missing something. It's also unlocked so you can freely switch carriers. I think there's a lot of people that will be enticed with this.
  - chipx86 11y ago
    You gain AppleCare+ as a benefit, bringing the price a lot closer. It's also unlocked, which could be nice for some people. Here's the big difference, though, at least with AT&T's Next: With Next, the "how often can you upgrade" and "how long do you have to pay" are highly mismatched. The most frequent upgrade plan is once very 12 months ("AT&T Next 12"). To get this, I have to commit to paying 20 months (or ~3.33 years). If I want to upgrade two years in a row, I've committed to paying 40 months (2 terms of the plan). That at least gets me 3 upgrades in that term. If I want to go for a 4th upgrade, we're now at an overall committed payment term of 5 years. That's fine if you're doing this long-term, but Apple's appears much simpler: You pay for 2 years. In that time, you get 2 phones. Verizon's program lets you upgrade "any time" you want, but only once you've paid off the cost of the new phone. Unless you pay a chunk of change early, this means one upgrade every 2 years, just like a contract, compared to Apple's once-a-year. What I'm not sure about with Apple's is whether you can end your 2 year plan with a second phone, and then terminate and keep the phone. This is what I'd most like to know before considering this further. The Terms and Conditions page doesn't seem to be up yet.. Given that the upgrade is once every 12 months, timing also seems important. I'd imagine you'd want to activate the plan just after a new iPhone comes out, and hopefully time it so that you end the 2 years right after another new iPhone comes out, if you really want the latest-and-greatest. Overall though, it seems to be more fair compared to AT&T's Next and Verizon's Early Upgrade programs.

rsync 11y ago

Both GE and GM turned themselves into banks. It ended poorly for both of them.

dave_sullivan 11y ago

Usually not a good sign when a company known for creating innovative real-world products shifts to creating innovative financial products. Except for Berkshire Hathaway moving from textiles to being Warren Buffet's investment vehicle -- that was a good move...

amazon_not 11y ago
I wouldn't really call an installment plan a very innovative financial product. And it's not like they'll stop making iPhones and focus on financing. It's just a power move to dominate the phone market and cement their lock on customers.
- rancur 11y ago
  next is iMortgage
  - easyfrag 11y ago
    probably not, this is a good dry run for car financing though
cx201 11y ago
That's actually how Porsche ended up in a position where it had to be 'rescued' (=bought) by Volkswagen during the last financial crisis: http://priceonomics.com/porsche-the-hedge-fund-that-also-made-cars/ http://priceonomics.com/porsche-the-hedge-fund-that-also-mad...

jwcooper 11y ago

They're not handling the financing. It appears to be going through Citizens Bank, and is an installment loan. [1] And, if you were hoping to use someone cheap like Cricket instead of Verizon, no such luck there either: "1. The iPhone Upgrade Program is available to qualified customers only with a valid U.S. personal credit card. Requires a 24-month installment loan with Citizens Bank, N.A. and iPhone activation with a national carrier — AT&T, Sprint, T-Mobile, or Verizon. " [1] http://www.apple.com/shop/iphone/iphone-upgrade-program http://www.apple.com/shop/iphone/iphone-upgrade-program