$700 is a lot of money. but for an iPhone, it's pretty darn cheap.
You can buy an
Apple, like every other company selling anything, always wants to sell as many products as it can. This year I think it is trying a different approach and is counting on people signing up for the new services as a way to bolster recurring revenue and profits. If Apple can make $500 million fromMaking revenue through services isn't a new idea — it's just new for Apple.
That's because of services. Google apps like
Apple is instead focusing on its user base and has a great deal on a game subscription as well as a premium package for entertainment. At $5 per month for each, consumers aren't going to balk at the cost and when you add up $5 times the number of iPhone users who are willing to pay you'll come up with a really juicy number to drop into the ledger at the end of the quarter. Apple is even giving some of it away for people who buy a new phone because it knows most people will enjoy it enough to continue after the trial period is over.Apple knows what its customers like and it's giving a little extra for a few dollars each month.
This makes a lot of sense. People just aren't buying new phones every year as they have in the past, numbers are down for every company making them, and there has to be a creative way to make up for the lost income potential. Providing a service that it knows customers will like — Apple knows exactly what you do on your phone though it likes to downplay it all — at a price that customers will like equals money in the bank. The only question is if it can make enough money to make up for less volume and lower priced hardware.
I bet it can.