Quick. Name a bank that is bigger and has more assets than Apple? Citigroup comes to mind and other than P/E ratio, Apple dwarfs the big bank at every measure. In fact, Apple has enough money on hand that it could start its own bank.
Apple Bank. That has a good ring to it, and would be the perfect way for Apple hoarders like me to make sure I get every new Apple product I want, whenever I want, and all I would have to do is pay the monthly bill. As it is now, I need to be more judicious about my Apple toys, and I end up paying Citigroup to pay Apple.
What if Apple became a bank and offered rental or leasing programs for Mac, iPhone, iPad, and Watch. Yes, already there’s the iPhone upgrade program which gets customers a new iPhone every year. The only ownership options better than that are these. Get a new iPhone as a gift. Or, buy a new iPhone and sell it when new ones come out.
Why should all that money for my Apple purchases go to Citigroup? Their interest rates are atrocious. Apple could sweeten the leasing pot by including AppleCare as it does now in the iPhone Upgrade Program. It’s that little bit of extra insurance to make sure your iPhone still works well when it’s time to trade it in for a new one.
Would an email campaign to Apple CEO Tim Cook help to turn the tide toward an Apple-sponsored lease program? He hasn’t responded to any of my messages so far, but there’s always a glimmer of hope.
Each of Apple’s products have a different life cycle. iPhone lasts for one to three years or so. Macs usually go a bit longer at two to five years, on average. I’m not sure about iPads, but I suspect three to four years is a good average. Watch is too new to determine and somewhat dependent upon new features in the next version.
How many of Apple’s customers would opt in for a one, two, or three year lease program for each product? Car leases go, on average, for 12-months to 39-months, so lit’s easy to see the value in a 12-month, 24-month, or 36-month option, whereby the monthly payment drops as the length of the lease extends.
Apple seems to be doing just fine without a rental or lease plan that encompasses all products, so the real question is, “Would Apple sell more Macs, iPhones, iPads, and Watch than without a lease plan?”
Unfortunately for my idea of a lease-everything plan, probably not. Apple’s customers remain, again, on average, somewhat more affluent that Windows PC customers or Android smartphone customers, so figuring out a way to pay for the latest and greatest is less of an issue.
Still, Apple Bank would bring in additional revenue and profits to the company, assuming CFO Luca Maestri could find enough banks to store even more money.
How is this idea like Microsoft?
Maybe you hadn’t heard, because the target was corporate enterprise IT groups, but Microsoft has a program called ‘Surface as a Service‘ which is little more than making monthly payments to own a Surface Book or Surface Pro until the next model comes out.
Apple could do that.