Apple will soon allow consumers to pay for Macs, iPads, and other hardware with monthly payments via the Apple Card. Bloomberg reports the corporation will launch its new interest-free hardware payment plans “in the coming weeks.”
The Big Tech firm started offering special financing for its iPhones through its credit offering late last year.
Apple Card New Hardware Financing Details
According to Bloomberg, Apple will let the public pay for its iPads, Macs, Pencils, Mac XDR Displays, and iPad keyboard through 12 interest-free payments via the Apple Cards soon. Similarly, the corporation will also permit qualified consumers to acquire AirPods, Apple TVs, and HomePods on six-month terms. As with its Phone financing program, consumers will manage their subsidized product payments through the iOS Wallet application.
As of this writing, Apple has not publicly confirmed its plan to expand its hardware financing program. Besides, the company has never stated how many of its customers bought iPhones with their Apple Cards.
That said, the Cupertino, California-based corporation’s first banking product is reportedly very popular with consumers. Last November, Apple Card-backer Goldman Sachs revealed it extended $10 billion worth of credit to around 3.1 million new borrowers. The firm also noted users racked up $736 million in new loans in just six weeks.
Why Apple is Expanding Its Hardware Financing Program
Apple is likely expanding its hardware financing program because its initial subsidized product offering proved lucrative.
Although Apple made headlines by making it smartphones available via 24-month payment plans, wireless carriers have offered similar terms to spur on purchasing for years. That financing system helped telecommunications companies sell millions of new, expensive handsets to consumers who lacked sufficient liquid financial resources. The iPhone maker probably found similar results with its credit product, which provides a 3 percent discount on its products.
After taking a significant revenue hit because of COVID-19 in Q1, the firm is eager to bolster its hardware business.
Apple’s high-end electronics will be a lot more appealing to consumers now that they can pay for them with credit. Citizens Point of Sale conducted a survey that found 76 percent of Americans are more likely to make a retail purchase when a seamless financing option is available. In addition, the tech corporation experiences multiple benefits when consumers buy its products with Apple Card.
Goldman Sachs extends lines of credit to iPhone owners with an interest rate of between 13.24 and 24.24 percent. Although neither party has revealed how it is divvied up, the hardware company presumably gets some portion of that revenue. As such, the corporation has two good reasons to make it easier for consumers to buy its products through Apple Card.
Furthermore, Apple currently offers users a 12-month payment-free subscription to its Apple TV Plus streaming service when they buy select new hardware. The firm created that offer to entice consumers to further buy into its ecosystem. As a result, its new financing program expansion represents another way for the company to enhance its revenue feedback loop.