Apple plans to launch an iPhone subscription purchase, which should allow the company to earn more revenue from a giant user base. The manufacturer is also building its own financial infrastructure to reduce its dependence on banks, according to Mark Gurman of Bloomberg.

Apple is working on an iPhone subscription service, which should significantly change the process of buying a smartphone, allowing users to essentially rent their device and receive a new model every year. As in other services of this kind, Apple wants to move to this model of sales for a simple reason: to make more money.

Now, only avid Apple fans get new iPhones every year. Most consumers only refresh when they feel it is necessary.

According to Counterpoint Research, the average selling price of an iPhone is about $825. This means that Apple earns just over $800 from one iPhone customer every three years. Launching a subscription could allow the company to increase that amount to $1,000 and even return an already used iPhones for sale on the secondary market.

Starting prices for the iPhone 13, Pro and Pro Max in the US without taxes start at $799, $999 and $1099. Take, for example, monthly payments of $35, $45 and $50, here’s how much Apple will earn in three years from a monthly subscription compared to the previous price:

iPhone 13 ($35 per month): $1260 for three years instead of $799;
iPhone 13 Pro ($45 per month): $1620 instead of $999;
iPhone 13 Pro Max ($50 per month): $1800 instead of $1099.

Obviously, it’s just math, but Apple can suddenly make a lot more money from one consumer. And the advantage for customers is the absence of having to pay hundreds of dollars in advance for a new iPhone. They can receive the latest model every year, not every three years.

The company can earn extra if the program is associated with high-yield digital packages Apple One and AppleCare.

Even if the monthly subscription to Apple smartphones is less than in the example, the company will still benefit from the constant influx of old phones that it can sell again. The company generates more than 40% of its profits from iPhone sales, so it is profitable to expand this business.

Eventually, Apple will make a lot more money than it does now without a subscription service. The iPhone has a fairly low bounce rate, and users of this service may well stay in it for ten years or more. That’s more than $4,000 in revenue per customer in a decade – on the iPhone alone – at $35 a month.

Another question that worries buyers is how this program will differ from a loan or installment from the operator. Subscribing to an iPhone is more like renting because the customer pays a commission that is not just the cost of a smartphone divided by two years. The customer pays part of the cost of the iPhone, but never fully owns it and can replace it when a new model comes out.

Apple is also working on a secret project to “break out” of the existing financial system. The company is serious about making a sensation in the world of financial services. In addition to working on a subscription service and a “buy now, pay later” offer, the company is developing its own financial server technology and payment processing technology to support future services with little reliance on partners.

This is Apple’s classic approach: over time, the company likes to move from third-party technology to internal systems to address critical issues.

Apple’s great success comes from a combination of hardware, software, and services. The company has always promoted a single package for its products, and developing its technology for fintech services is a clear part of this strategy.

There are other benefits. By abandoning the services of external partners, which are now focused on the US market, Apple will be able to more quickly expand services in other countries. Developing new features is also likely to take less time if fewer outsiders are involved. The first financial service that is likely to use Apple technology will be “buy now, pay later”.