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16th September 2016

Apple’s iPhone 7 is available to buy today!

So, did the usual chaos unravel as people want to be first in line for the latest device?

Well, not exactly this year.

We’re people standing outside stores queuing for their place?

PAY-IPhone-queues-are-smaller-in-2016-top-than-they-were-in-2015-bottom-in-Birmingham

Well, some were. But compared to normal queue lengths on iPhone opening day, today was very reserved.

Was that down to the contentious decision to remove the headphone jack from the iPhone? Was it because Apple decided to only allow customers who had pre-ordered their device to collect them today?

Maybe

But Apple launched something very significant with the iPhone 7 that will be a game changer…….

Was it the new sexy colours? Nope. Was it the new and improved cameras? Nope.

You see, Apple have kept this very low key indeed, probably not to bite the hand that feeds you. But, Apple have casually dropped into place the Apple Upgrade Programme!

Now, it might not seem like breaking new ground but let’s just examine the commercial facts that this introduction will bring to Apple, as well as the attraction for customers to be weaved into Apple’s lair!

Customer Benefits

The programme is at 0% interest! That means you can buy an iPhone and upgrade it every year for the same monthly price. No more hanging on to the handset for 24 months until your upgrade is due.

The iPhone is not tied to any carrier. You can simply move your carrier around as you wish. You can even have a PAYG contract with your iPhone if your usage isn’t high. Meaning you never need to compromise on a terrible phone if you want a low tariff

You get AppleCare+ on for the term of your agreement so no more problems of dealing with a smashed screen for the remainder of your contract. If its broke, let them fix it for you.

You still own the phone at the end of the agreement so if you don’t want to upgrade simply take the phone and cash in before starting a new agreement.

Apple Benefits

They now own the relationship with the customer. This is the most significant benefit as they are now in complete control of the ownership experience. No more carrier issue getting in the way of looking after the customer. Apple can now do what it does best. Deliver a great experience!

The clever contract length means that Apple will expect an influx of people in September to start this programme. The expiry of a phone with 20 months on it, should more often than not leave you just at the right point to stay with them for the next upgrade!

No carrier or reseller discounts required here to sell these handsets. Customers are paying full price, albeit at an interest free rate. A win/win here then as Apple increases their transaction value and the customer feels the benefit with no middleman in the agreement!

By keeping the customer in their CRM, they are able to look at customer behaviour and influence other purchases within the Apple product range. You don’t expect this to stop with the iPhone do you? Entering into a lease agreement with Apple could apply across all of their devices once they check this experiment works. Imagine being able to upgrade your iPad or your Mac in the same way. Essentially you will become entwined in the Apple family.

Which isn’t necessarily a bad thing!

So, if it is all good news then why is Apple keeping so quiet and reserved about it then?

Well, I can imagine this hasn’t gone down too well with the carriers.

Nor will it have gone down particularly well with the resellers either!

They have to be careful that they don’t isolate the hand that feeds them, but if they have thought this through and have something up their sleeve to keep them happy then everybody will be a winner.

In essence Apple has copied the automotive sector and moved customers to a recurring subscription. Or is it the Adobe model kicking in? The trend of renting your solutions is growing and Apple are just the first to jump onto that bandwagon to disrupt the industry yet again!

A smart move from Apple then, that I can see being a huge success!

(P.S. Other smartphone brands are available, but are likely not as sexy or addictive as this one! And yes, I am a self-confessed Apple addict!)

Until next time, love the experience!

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