Apple Card users can now finance iPhone purchases for 24 months, interest-free

It’s not quite an “Apple Prime” subscription, but it’s compelling. Apple on Wednesday introduced a new program that will allow Apple Card users to finance their iPhone purchases for 24 months, without paying interest. The program aims to appeal to consumers who frequently upgrade their iPhone to the latest model, but often turn to their carrier to finance those purchases.

With the Goldman Sachs Apple Card, those iPhone users will have another option — and one without the associated interest and fees of a traditional credit card purchase, Apple says. In addition, the Apple Card offers 3% back on purchases from Apple, which further sweetens the deal.

The program helps to lay the groundwork for what some believe may eventually become a larger subscription product for Apple, or a so-called “Apple Prime” — a name that references the Amazon Prime membership program that includes a variety of perks alongside its fast, free shipping.

An Apple hardware subscription could see users instead paying for the privilege of using the latest Apple hardware, while also bundling in other services, like AppleCare, similar to its existing iPhone Upgrade Program today, which similarly offers 0% APR but can charge fees. But a true “Apple Prime” would include other Apple subscriptions under the same roof, like iCloud, Apple Music, Apple TV+, Apple News+ and/or Apple Arcade, in some sort of bundle deal. 

Already, Apple has begun to experiment with subscription bundles. This week, for example, it announced a bundle for students that includes Apple Music and Apple TV+ for the same price as a student Apple Music subscription alone ($5/mo). And in a sense, Apple is already bundling its new Apple TV+ streaming service with its hardware, as it’s giving the service away for free with a new device purchase in its first year.

Apple has been steadily moving towards a more robust iPhone subscription program for some time.

In recent years, it has promoted iPhone trade-ins as something of a no-brainer for bringing down the cost of a new iPhone purchase. At the company’s iPhone 11 event in September, for example, Apple put up a slide that emphasized the new iPhone 11’s low price, when viewed under this model. Instead of a starting price of $699, the iPhone 11 could be as little as $399 — or $17 per month, Apple said — when you traded in your iPhone 8. The iPhone 11 Pro was $25 per month with an X trade-in, and the Pro Max, would be $29 per month with an X trade-in, Apple also said.

These sorts of promotions seem to be working, as more Apple customers are turning to trade-ins than in the past.

“We…continue to see great results from our trade-in program with more than five times the iPhone trade-in volume we had a year ago,” noted Apple CFO Luca Maestri on Apple’s earnings call.

The larger idea is to encourage Apple’s customer base to viewing the iPhone not as a big, expensive one-time purchase, but as just another monthly bill you have to pay. Tack on a few extras, like a warranty and some media and entertainment options, and Apple has the meat for a real iPhone-led subscription — it’s very own “Apple Prime,” so to speak. And thanks to the Goldman Sachs Apple Card, it has a way to incentive users to buy from Apple directly.

 

 

 

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For the first time in two years, the smartphone market shows signs of life

All is not lost for smartphone manufacturers. On the heels of two years’ of global stagnation, the category is finally showing some signs of life. Much of the bounce back comes as manufacturers are working to correct for dulled consumer interest.

I wouldn’t put too much weight in the numbers right now, as they’re little more than an uptick. Numbers from Canalys put shipment growth at one percent from Q3 2018 to Q3 2019. In most in cases, that would be a modest gain, at best, but this is notably the first time in two years that the numbers have been heading in the right direction.

Samsung saw the biggest gains — a phenomenon the analyst firm chalks up to a shift in strategy to eat some of its profits. The move has paid off for the quarter, with an 11% growth in device shipments to 78.9 million devices shipped. That gives the company the largest global marketshare at 22.4%.

Huawei, too, saw impressive growth, year-over-year, commanding second place with 66.8 million units shipped. Much of its growth came from China, which has ramped up spending on the company’s products as it has run into regulatory scrutiny overseas. Resumption of sales in some international markets helped juice growth as well. Of the top three, Apple continued to struggle the most, with a 7% loss from 2018.

For now, at least, none of the these numbers qualify as full turn around for a stagnant category, though the upcoming roll out of 5G coverage could help numbers in the right direction in the coming year.

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Apple Card users can now finance iPhone purchases for 24 months, interest-free

It’s not quite an “Apple Prime” subscription, but it’s compelling. Apple on Wednesday introduced a new program that will allow Apple Card users to finance their iPhone purchases for 24 months, without paying interest. The program aims to appeal to consumers who frequently upgrade their iPhone to the latest model, but often turn to their carrier to finance those purchases.

With the Goldman Sachs Apple Card, those iPhone users will have another option — and one without the associated interest and fees of a traditional credit card purchase, Apple says. In addition, the Apple Card offers 3% back on purchases from Apple, which further sweetens the deal.

The program helps to lay the groundwork for what some believe may eventually become a larger subscription product for Apple, or a so-called “Apple Prime” — a name that references the Amazon Prime membership program that includes a variety of perks alongside its fast, free shipping.

An Apple hardware subscription could see users instead paying for the privilege of using the latest Apple hardware, while also bundling in other services, like AppleCare, similar to its current iPhone Upgrade Program today. But a true “Apple Prime” would include other Apple subscriptions under the same roof, like iCloud, Apple Music, Apple TV+, Apple News+ and/or Apple Arcade, in some sort of bundle deal. 

Already, Apple has begun to experiment with subscription bundles. This week, for example, it announced a bundle for students that includes Apple Music and Apple TV+ for the same price as a student Apple Music subscription alone ($5/mo). And in a sense, Apple is already bundling its new Apple TV+ streaming service with its hardware, as it’s giving the service away for free with a new device purchase in its first year.

Apple has been steadily moving towards a more robust iPhone subscription program for some time.

In recent years, it has promoted iPhone trade-ins as something of a no-brainer for bringing down the cost of a new iPhone purchase. At the company’s iPhone 11 event in September, for example, Apple put up a slide that emphasized the new iPhone 11’s low price, when viewed under this model. Instead of a starting price of $699, the iPhone 11 could be as little as $399 — or $17 per month, Apple said — when you traded in your iPhone 8. The iPhone 11 Pro was $25 per month with an X trade-in, and the Pro Max, would be $29 per month with an X trade-in, Apple also said.

These sorts of promotions seem to be working, as more Apple customers are turning to trade-ins than in the past.

“We…continue to see great results from our trade-in program with more than five times the iPhone trade-in volume we had a year ago,” noted Apple CFO Luca Maestri on Apple’s earnings call.

The larger idea is to encourage Apple’s customer base to viewing the iPhone not as a big, expensive one-time purchase, but as just another monthly bill you have to pay. Tack on a few extras, like a warranty and some media and entertainment options, and Apple has the meat for a real iPhone-led subscription — it’s very own “Apple Prime,” so to speak. And thanks to the Goldman Sachs Apple Card, it has a way to incentive users to buy from Apple directly.

 

 

 

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Apple beats on Q4 earnings after strong quarter for wearables, services

Apple’s iPhone sales still make up over half of its quarterly revenues, but they are slowly shrinking in importance as other divisions in the company pick up speed.

Apple’s stock remained largely unchanged after-hours following the release of its Q4 earnings. The company delivered earnings per share of $3.03 versus the street’s estimate of $2.84 on revenue of $64 billion compared with expectation at $62.99 billion.

The big story continues to be major growth in Services, iPad and Wearables while iPhone and Mac sales continue to shrink year-over-year.

As you’ll remember, Apple no longer reports unit sales of its iPhone, Mac and iPad lines, something that is largely the result of declining unit sales and higher average selling prices. Services, Wearables and Other, and iPad saw year-over-year gains, while the iPhone and Mac lines are still seeing revenue slumps.

• iPhone sales were down 9% year-over-year, to $33.36 billion
• Services were up 18% YoY, to $12.5 billion
• Mac sales were down 5% YoY, to $6.99 billion
• “Wearables, Home, and Accessories” were up 54% YoY, to $6.52 billion
• iPad sales were up 17% YoY, to $4.66 billion

The company is continuing to add to some of its highest-growth businesses. The company announced the release of a new high-end set of AirPods yesterday, which will likely increase average selling prices among its wearables division. The company also has a number of paid services, including Apple TV+, that will be launching soon.

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A week-long iOS App Store bug wiped out over 20M ratings

An accidental sweep of the App Store removed over 20 million ratings from the most popular apps — including from well-known brands like Google, Microsoft, Starbucks, Hulu, Nike, and others — as well as from smaller developers. The issue began on October 23, 2019 and wasn’t resolved until yesterday, October 29. Apple hasn’t yet explained how such a sizable and impactful change to app ratings occurred.

This massive ratings drop was spotted by the mobile app insights platform, Appfigures.

The firm found that more than 300 apps from over 200 developers were affected by the sweep, which wiped out a total of 22 million app reviews from the App Store. On average, apps saw a 50% decrease in ratings in the affected countries, which included the U.S.

The U.S. was hit the hardest, however, as some 10 million ratings disappeared. But the sweep was global in nature, hitting all 155 countries Apple supports. China, the U.K., South Korea, Russia, and Australia, also felt a noticeable impact.

A few apps were hit harder than others. Hulu, for example, lost a whopping 95% of ratings in the U.S., while Dropbox and Chase lost 85%. Several companies affected by the bug declined to comment, but told us that the rating removals weren’t done at their request — they were just as surprised as everyone else.

Other big apps that saw their ratings disappear in the U.S. included Chase, Walgreen, Venmo, Amazon Prime Video, Southwest, Hotels.com, Disneyland, Ibotta, ESPN, Amex, Xoom, Fandango, Skyscanner, Google Classroom, Nike SNKRS, My Disney Experience, Old Nav, and others.

Of the over 300 apps that got hit, about half (154) saw a drop of more than 100 ratings, Appfigures said.

WOW @Starbucks iOS app lost about 1.3mln of ratings overnight! @hulu lost about 900k, as well as dozens of other apps.
I hope this is just @AppStore bug. pic.twitter.com/cUIrb8yeeN

— ilia kukharev (@ilyakuh) October 28, 2019

With little information about what happened, developers speculated that Apple was possibly trying to clean up fake app ratings. This theory doesn’t seem that likely, though, because Appfigures found that both positive and negative ratings were removed. Had the sweep been focused on fake ratings, then only the positive (fake) ratings would have been removed.

Another theory is that Apple was trying to speed up its ratings system and something just went wrong.

Unfortunately for some of the impacted developers, the bug had a profound effect on their app’s “Overall” rating. Their app may have dropped by several stars as a result of this problem. And that, in turn, could have hurt their ability to get downloads from App Store search results or Search Ads during the week.

Some of the impacted companies (and Appfigures) confirmed to TechCrunch the missing ratings were restored as of yesterday.

Oh man, this happened to one of my clients. When from 4.6 with ~400 ratings to 2.6 with 5 ratings. Had a support request in, but glad to see it resolved.

— Ben DiFrancesco (@BenDiFrancesco) October 29, 2019

Oddly, this isn’t the first time app ratings disappeared nearly overnight.

A similar incident took place last year, when an App Store bug led to thousands of iOS apps losing half their ratings over a weekend. In both cases, Apple quietly resolved the bug, but never offered any statements about what happened.

We reached out to Apple on Tuesday but the company has not yet commented.

However, we hear that Apple spoke directly to some developers to explain the rating removals were done in error and it was working to fix the situation, which now appears resolved.

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Apple TV+ will be free with an Apple Music student subscription

Ahead of Friday’s launch of Apple’s new streaming service, Apple TV+, the company announced an Apple Music/Apple TV+ bundle deal specifically aimed at making the service more affordable for younger subscribers. According to an Instagram Story published by Hailee Steinfeld, star of Apple TV+’s first potential hit series, “Dickinson,” Apple Music student subscribers will be able to stream Apple TV+ for free.

The announcement was spotted earlier by 9to5Mac.

After a series of Instagram-hosted Q&A’s meant to stoke excitement for the show among her fans, Steinfeld announced the bundle deal by saying that: “for those of you who are students with an Apple Music student subscription, you can now get Apple TV+ for free.”

She noted this means student subscribers will not only be able to watch her new show on Friday, November 1st, they also can check out her new single “Afterlife” with the same subscription.

The Apple Music student subscription is currently $4.99 per month, which provides full access to Apple Music’s catalog of 50 million songs, live local radio stations, curated playlists and other original content.

An Apple Music-Apple TV+ bundle had been rumored to be in the works, prompting rival Spotify to team up with Hulu to pre-emptively strike with a bundle deal of their own.

But when Apple formally announced its TV streaming service, it instead surprised everyone by offering the service for free with the purchase of a new Apple device.

Of course, students are less likely to upgrade their phones and tablets as often as working adults, given the costs. That means they would have missed out on the “new device” deal, and instead would have had to pay the $4.99 per month subscription for the TV service. 

Meanwhile, Apple TV+’s debut shows have received mixed reviews from critics ahead of launch — with the star-powered “The Morning Show,” featuring Jennifer Aniston, Reese Whitherspoon and Steve Carell, even being called “dull” and “underwhelming.” “Dickinson,” however, has been a bright spot, with some even saying the show is set to be Apple TV+’s breakout series. It would make sense for Apple to capitalize on that attention — as well as on Steinfeld’s 12.4 million Instagram followers — to get more people watching.

Apple didn’t share any additional information about the Music/TV+ bundle beyond what Steinfeld announced. There was no related press release or even a tweet posted to the Apple TV Twitter account. In other words, Apple was narrowly targeting Steinfeld’s built-in fan base with the news.

It appears this is not a limited-time deal with an expiration date attached, just an ongoing benefit of a student Music subscription.

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Wearable spending forecasted to increase 27% in 2020

New numbers from Gartner mark another major increase for global wearable spending in 2020. The analyst firm forecasts a 27% jump in end-user spending over this year, from $40.5 billion to $51.5 billion. Once again, the pack is lead by smartwatches, which continue to burn the hottest among in the space.

Interestingly, the increase on smartwatch spending from $17 billion to $22.8 billion will be lead by decreasing prices (a 4.5% decrease in average selling prices in 2021). Those are, in turn, the result of a combination of increased competition from Samsung and some external pressure from Fitbit, which has found a sweet spot at around $200 a unit. Chinese manufacturers like Xiaomi have also gone a ways toward decreasing the price on the low end of the market. 

Apple, in turn, has responded by keeping the two-year-old Series 3 on the market at the $200 price point. It’s a sign of a maturing category that no longer commands as much of a premium pricing in past generations. Google, meanwhile, recently bought a fair chunk of IP from Fossil and has reportedly been eyeing a Fitbit acquisition after years of struggling to crack the category.

Headphones have continued steady growth, as well, thanks to an explosion in fully wireless earbuds, lead by Apple and Samsung, with the recent lower cost addition of Amazon. Google, too, has been eying a reentry into the category next year with the return of its much panned Pixel Buds. Even Microsoft plans to enter the category with its unique Surface Buds.

Gartner predicts continued spending growth in wearables for 2021, with spending hitting $62.9 billion.

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