Apple aims for iPhone payment plan

  • 23/09/2015
Apple aims for iPhone payment plan

It's not just another iPhone launch.

This time, Apple is pushing not only a new device, but what it says is a new relationship with its customers.

By offering US customers monthly instalment payments on direct sales and a new lease option Apple is trying to break the stranglehold of mobile carriers.

US carriers are moving away from the model in which the smartphone is offered at a subsidised price in exchange for a two-year contract.

This means the price of the iPhone – US$650 and up – is no longer hidden in monthly service fees, creating a challenge for the maker of the high-end smartphone.

Apple is meeting the challenge head-on by offering to finance the phone for as little as US$27 per month, or allow customers to lease on an annual basis to upgrade to a new phone each year.

It was not known if Apple would expand the program to non-US customers.

The bold move by Apple, which begins selling its new iPhone 6S and 6S Plus on Friday, gives the company a new connection with customers while also allowing an easier switch of carriers.

Some analysts say Apple's moves may boost sales by shortening the upgrade cycle – allowing customers to get a new iPhone each year on relatively easy terms.

Katy Huberty at Morgan Stanley said it could boost iPhone shipments by 6.5 million in 2017.

It has the added advantage of getting pre-owned iPhones out to more customers who can't afford a new one.

The move by Apple has also sparked speculation it could become its own mobile carrier, following the lead of Google Fi which connects with multiple networks around the globe.

Apple has downplayed reports it is seeking to become a mobile virtual network operator to sell its own voice and data plans.

But some say it could be part of a future plan for the California giant.