Some months ago, Apple has announced the possibility of paying your Apple Care+ plan not just by an upfront payment, the time of services in the focus is finally here. I think we all already got used to In-App-purchases when it comes to the apps we use day by day, but having a subscription for the iPhone, iPad or Apple Watch is quite new. Or not?
Seen from another point of view, this scenario has been on the horizon for quite some time and (of course) it doesn’t focus on Apple only. Indeed it has been an obvious model that got just its extension: iCloud storage plan? Subscription. Microsoft 365? Subscription. Spotify? Subscription. Netflix and Co. ? Subscription. Xbox Live? You may already guess it — subscription. Sounds easy, doesn’t it? Apple Arcade and TV+ just take their seat in this row of services.
Recently news were spread that an Apple Store-employee tells that the main focus is not selling hardware anymore, it’s all about services. The monthly Apple Care+ announcement just underlines this and shows that — not only — Apple is finally on the long train of subscriptions serving as the main business model. This development has already been on the horizon for quite some time but I think it was never more clear than now.
Looking at the apps I use day by day, I just can agree to that. Some time ago, you bought an app from which you think it was useful and worth the money. A one-timer. Today, those apps are just the gate to the service behind it — a service that is (what a coincidence!) billed yearly (you may save some bucks here) or monthly. Thinking about it, this is not different from the expenses we have for insurances — even those may be payed on a monthly base or per year.
Let’s take Strava for example, an app I am using for quite some time now and just returned to the yearly plan: The app itself is free and can track your runs and bicycle sessions. Further insights, statistics and the social components (competing with others and things like that) are part of the subscription. I see the additional value here — individual training plans, many diagrams that measure your success (or not) or the beacon-feature to show your relatives where you’ve been running around lately are great features to have. 59,99 EUR a year or 7,99 EUR per month for all three major packs may be on your bill — and if you need these features, you will pay them.
Heading on to Ulysses, the app I am writing with: 4,99 EUR a month or 39,99 EUR year — absolutely worth its money although I’d prefer a one-time-payment like it was years ago. But — on the other side — I do also understand that keeping an app alive by actively supporting the development leads to the logical consequence of turning to a service-based subscription. The latest addition to the row of paid services is Scanbot which had a certain price in the previous versions (bought it and I was ready to go!) and turned into a subscription model as well: 3,99 EUR per month or fair 23,99 EUR a year is okay as well if you need the pro features of this app that I am using for years now.
Taking a breath and thinking about all this it is clear that the subscription model has been there for quite some time but now it’s just a little bit more transparent as nearly everyone uses it. Coming back to my favorites at Apple, the company has begun shifting from a hardware company to a service provider on many fields some time ago and this does also include the shift from the classical apps that were paid just once. Summing up all my expenses for services at the moment (you’ve seen excerpt of my examples at the beginning of this article) it is quite interesting how much money is already spent each month just by subscriptions. I may not completely like it but I think I understand the story behind all this — after all, an active subscription is also a steady piece of customer loyalty and this one the aspects what everything is still about, isn’t it?
What do you think? Is this development a natural, inevitable development, the future of payment for apps and features? Or just a bad business model that embraces our digital life nowadays, cloaking and chopping a sum of expenses into small nibbles that may go unnoticed on your monthly credit card bill?