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Apple訂閱制，終於來了【Tony幫你做功課】#電商tony #行銷 #電商#電商tony #行銷 #電商#Apple #AppleUpgrade #iPhone17 — Transcript

by 電商Tony陳 · 5,558 words · 860 segments · language en · Watch on YouTube

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0:00Tony does the homework for you
0:01Apple's subscription plan is here
0:03Letting you get it cheap — that's the ruthless part
0:06Let me give you the conclusion first
0:07Apple's subscription plan is officially here
0:08The price is super sweet, and honestly ridiculous
0:12Hi, I'm Tony Chen from e-commerce
0:13Welcome to the "Tony Does Your Homework" series
0:15In this series I don't lecture you with big theories
0:17I just walk you through great business cases and gossip
0:19And you can think about it too
0:20Whether you can apply it to your own company
0:22If it really does strengthen your business
0:24You don't need to thank me
0:25Just always remember to treat your employees and customers well
0:28Alright, let's get started
0:29Last episode I told you about the new food delivery law taking effect
0:32This time I'm telling you about
0:33Apple launching a subscription plan
0:36Not software — hardware
0:38Let's talk about a piece of news
0:40Let me read you the headline
0:41Apple launches the Apple Upgrade subscription plan
0:44Beyond responding to price hikes, what's the real calculation behind it
0:48Look at this image, look closely — they're serious
0:50How could a new phone be this color
0:52If I put this in an internal pitch deck
0:56Wouldn't my boss throw me right out the door
0:59They're serious. Bold. That's Apple for you
1:03So here's the content
1:04According to a Bloomberg report
1:06Apple is about to launch a leasing plan
1:08And Apple Upgrade
1:10As I'm writing this script, it has already launched
1:12Officially launched
1:13Right now it's limited to the US market
1:15And before you sign up, they run a credit check
1:18You can sign up at physical stores or online
1:21And among the current hardware subscription products
1:25The hardware coverage is pretty comprehensive
1:28Pretty much the whole product line
1:29The iPhone 17 series is all available on subscription
1:33And because they've launched so many
1:34subscription products
1:36Really a lot, so many kinds, I can't cover them all
1:38So next
1:39I'll use the iPhone 17 as an example
1:42To explain it to you
1:42Alright, so this subscription plan
1:44Apple had actually been considering it for a while
1:47But due to financial risk and financial regulations
1:50They called it off internally back in 2024
1:53You know
1:53Did Apple ever do that Apple Card thing?
1:56That's Apple's credit card
1:58Whatever you spend on it
1:59They'd give you like 1% cash back
2:01It ended up blowing up financially
2:02Because there were too many deadbeats
2:04So now that they're doing this subscription thing again
2:06Something tied so closely to finance
2:07They get nervous
2:09Who are they partnering with? I'll tell you in a bit
2:12Alright, so now they're pushing the subscription plan
2:13Let me give you the conclusion first
2:15Apple is going to sell for more in the future
2:17Why push this
2:18Because it's probably going to get more expensive
2:21And they're afraid consumers won't accept it right away
2:23So they use a subscription plan
2:24To make consumers feel it's okay, pretty cheap
2:26And on the topic of Apple raising prices
2:28I made a video about that before
2:30You can go check it out
2:31Let me continue
2:32So just how cheap does this subscription get
2:35I'm telling you, noticeably cheap
2:37Look at the part I've boxed
2:39Americans pay $34.99 a month
2:42You have to think of it in terms of American income
2:44Earn in America, spend in America
2:46$34.99 a month
2:48And you just sign a two-year contract
2:50Alright, so how much is the iPhone 17 Pro Max
2:52The orange one, the biggest one
2:55Okay, $1,199
2:56Let me do the math
2:58After you sign this contract today
3:00Paying $34.99 a month — 35 bucks
3:04After two years, how much have you paid in total
3:07I did the math for you
3:08$839.76
3:12Right?
3:12And this iPhone 17 Pro Max
3:14If you bought it outright, how much would it cost
3:16$1,199
3:19How is this possible
3:20So what's the difference here
3:22$359.24
3:24That's basically 360 US dollars
3:26Converted to Taiwan dollars
3:28NT$11,645
3:30Wow, Apple is being generous
3:33They're actually letting you own it cheap
3:35The top-spec iPhone
3:37Ridiculous
3:38And you're paying $34.99 a month
3:41Which converts to NT$1,134
3:44Isn't that about the same as a monthly plan
3:46About the same as a monthly internet bill
3:48And with that you get Apple's newest phone
3:50If it were you, would you sign?
3:51If it were me, I'd sign
3:52It's really cheap
3:53Even by Taiwanese income standards it counts as cheap
3:56Let alone American income
3:58Someone on entry-level pay would rush to sign this
4:02Because they can afford it
4:03So installment plans are a pretty evil thing
4:07And it locks in two things at the same time
4:09First, the desire to upgrade
4:11Because you're now on a subscription
4:12So even if you want to switch phones, you can't
4:14Early termination comes with a penalty
4:16You pay off the remainder in one go
4:18And second, the timing of your upgrade
4:21How long did I say the subscription term was
4:23How long is one contract
4:24Two years
4:25Why set it at two years
4:26Because they're planning it out step by step
4:28So that in two years you can switch to the newest phone
4:30Which one
4:31In two years you can go straight to the top spec
4:33The newest iPhone that just came out
4:35And then sign another two-year contract
4:38Let me explain what happens after two years
4:40You have three options
4:41Here's the first — switch straight to a new phone
4:44But you have to return the old one, obviously
4:48Which means they have a way to handle
4:52the sales channel for old, secondhand, used phones
4:55Here's the second — don't renew
4:57Then you also have to return the phone, of course
4:59Third — don't renew
5:01You can just pay the difference and buy the phone outright
5:05And if you don't choose any of them
5:06You can keep paying the subscription fee for six months
5:09And after those six more months
5:11The system will assume you want to buy the phone
5:14So they just charge your card directly
5:16Next, you need to understand
5:17why Apple is doing subscriptions now
5:20Let me first go over the widely accepted explanation
5:23which is that subscriptions were long overdue
5:26Software subscriptions have been everywhere
5:28So why are hardware subscriptions only starting now?
5:30Only starting in 2026
5:31Two reasons
5:33Okay, the first one
5:34The one covering the price difference for you isn't Apple
5:38It's a company called Klarna
5:40That's Swedish — Swedish pronunciation
5:42It's a Swedish buy-now-pay-later provider
5:45Basically they play with money, they're in finance
5:47Buy now, pay later — Taiwan has it too
5:49You probably know about it
5:50The payment provider fronts the money to the merchant
5:53And then this payment provider
5:54is responsible for chasing down the consumer
5:56and takes some percentage cut
5:58So Apple doesn't have to worry
6:00about what happens if consumers don't pay in the future
6:02Because Klarna has already fronted it all
6:07Apple just sits up high
6:08elegantly selling the subscription dream
6:10And then this company
6:12collects the money, the price difference
6:15slowly from consumers itself
6:17But right at the start it has to
6:18front the entire lump sum to Apple
6:20Okay, the second reason — what's it for?
6:22Apple Intelligence
6:26Look at the part I've boxed here
6:28There are currently 850 million iPhones out there
6:31that can't run the basic
6:32Apple Intelligence features
6:35This comes down to hardware
6:36The hardware tier isn't high enough
6:38So it just can't run
6:39And there are over 1.3 billion iPhones
6:41that can't support the most advanced Siri features
6:44Because Siri AI
6:45has extremely demanding system requirements
6:48How demanding?
6:49Look at this screenshot
6:51Apple itself says you need
6:52at least 12GB of RAM or more
6:55So the vast majority of iPhones out there
6:57can't use Siri AI
6:59Right
7:00And for the development of Siri AI
7:02what does that mean?
7:02It's fatal
7:04Why?
7:04If most iPhones in the market
7:06simply can't run the new Siri
7:09then no matter how many resources Apple pours into optimizing Siri AI
7:12it doesn't really mean anything
7:13Because that's only a tiny group of users
7:15So what can launching subscriptions do?
7:17Speed up the upgrade cycle
7:19And get you to —
7:20You say there must be a catch
7:21Okay, you run the numbers and it's actually 10,000-plus cheaper
7:23Really? Then I'll sign up too
7:25And that speeds up the upgrade cycle
7:27which for the adoption of Apple Intelligence
7:30is extremely important
7:32And don't forget
7:33on the AI front
7:34Apple was already a step behind the big players
7:36Right?
7:37Even its current model
7:38relies on Google's Gemini
7:41to help train it
7:42So if it wants to catch up
7:44it has to find a way to increase
7:45usage among Siri AI users
7:48Okay, so launching subscriptions makes a lot of sense
7:50Right?
7:51Make it easier for consumers to upgrade
7:53And then Apple gets more Siri AI
7:56training data
7:57And who bears the payment risk?
8:00Klarna bears it
8:01Beautiful
8:04The premise is that your negotiating power has to be overwhelming
8:07Only then will someone be willing to do business with you on their knees
8:10Next, you need to understand
8:12why Apple's subscription is priced so cheap
8:16If you think what you've seen so far is decent
8:18and pretty good
8:18remember to hit subscribe
8:20You're also welcome to join my channel membership
8:22to give me the motivation
8:23to make more great videos for you
8:25Okay, back to the main topic
8:27Next I'll walk you through
8:29my own thinking on this
8:31and what I personally believe Apple's next move will be
8:35But before that
8:36let's look at a little side story
8:39Look at this news
8:41What it says is
8:42an engineer digging through the backend of the iOS 27 beta
8:46found a piece of code
8:48It's an app control system
8:51that allows authorized financing
8:53or provider apps to register an iPhone
8:56run continuous status checks
8:59and is able to block apps from working
9:02leaving only Phone, App Store, Wallet
9:04and so on
9:05Okay, what does that mean?
9:06It means if you sign up and then stop paying
9:09or whatever
9:10your iPhone becomes a crippled version
9:12Remotely, they can reduce it
9:14to just being able to make calls
9:16and send texts
9:18That's it
9:18Okay, so under what circumstances would you need
9:21to turn a consumer's iPhone into a crippled version
9:23via remote control?
9:25Isn't it installment payments
9:26where the payment goes overdue
9:27and so on and so forth
9:29Then I remotely lock your features
9:31and unlock them once you pay
9:33The system is already written
9:34And after this feature got dug up
9:36Apple came out to deny it
9:37Saying we would absolutely never lock a user's phone features
9:40just because they didn't pay
9:43Then why did you write this?
9:44Burying your head in the sand
9:45So let's just treat it
9:46as PR spin
9:48Anyway, when they want to activate this feature later
9:50they can just play the victim then
9:52I've already figured out the sob story
9:54Let me act it out for you
9:56We've found over 2 million iPhones
9:59with overdue payments
10:00In order to protect the rights of those who do pay
10:02we have no choice but to lock the features
10:05on these unpaid iPhones
10:06and so on and so forth
10:07Totally reasonable, right?
10:09OK, let's continue
10:10Why does Apple
10:11want to offer such a favorable subscription plan
10:13Look at the part I've boxed
10:15Officially guaranteed, the money you pay in the future
10:17will absolutely never exceed the retail price of this phone
10:21If you want to buy it outright, you just pay the difference
10:24So what exactly is Apple making money on
10:26Besides making money on the phone
10:27what they want to earn more of, I'll tell you, is the money from the peripherals
10:31What does that mean
10:31Look at the part I've underlined
10:33Apple's revenue last quarter reached 143.76 billion US dollars
10:37The main driver was iPhone revenue of 85.3 billion US dollars
10:41and services division revenue of 30 billion US dollars
10:43So if we look at 2025 Q4
10:46iPhone alone plus software services
10:48and this "services" refers to
10:50things like iCloud, Apple TV, that kind of thing
10:53software services provided by Apple
10:55adding those two together
10:57already reaches 80% of Apple's total revenue
11:00OK, so now you understand
11:02why Apple is doing this
11:03I deliberately make your monthly payment what
11:05super cheap
11:06so cheap that you feel like
11:08paying cash to buy the phone outright
11:09really isn't that worthwhile
11:11because I know
11:12after you buy the phone, you'll definitely buy my services
11:14And if you don't buy them, someone else will
11:16And then all the various payment collection and default handling
11:19who bears that
11:19It's not Apple
11:20It's Klarna that bears it
11:22So why wouldn't I roll this out, right
11:24And if I were Apple
11:26I'd double down and roll out another perk
11:28letting customers on the subscription plan
11:31use all of Apple's various services
11:33all at a discount
11:35making you feel like
11:36if I don't use this, I'm really losing out
11:39For example, Apple TV costs money
11:41so if you're on the subscription plan
11:44you get three free months per year, something like that
11:46or four free months a year, or six months
11:48It just depends on whether they need
11:49to fight for the revenue on that side
11:50That's it
11:52Then they can keep these people
11:53tied into Apple's ecosystem
11:55And don't forget
11:56paying 1,134 NT dollars a month
11:58will also make the young demographic
11:59who originally thought the Pro Max was too expensive
12:02and consumers with limited budgets
12:03step into Apple's ecosystem more easily
12:06And in the end, what happens to everyone
12:06Everyone's got an iPhone in hand
12:08And then I turn back around
12:10and keep squeezing prices from the suppliers
12:12Isn't this just standard operating procedure?
12:13Right
12:14Because I've got volume
12:15And I'm also the high-and-mighty Apple
12:17So everyone has to kneel down to do business with me
12:19So making the iPhone subscription plan
12:21very cheap
12:22currently looks like a completely reasonable tactic
12:25Apple's once lofty head held high
12:27that former glory?
12:29There's no such thing anymore
12:31Apple even dares to just
12:34use Google's AI directly
12:38They even dared to launch the MacBook Neo
12:41that laptop with super high value for money
12:44Personally, I think they've already stepped down from the altar
12:47You know
12:48So face
12:50right now doesn't look like Apple's most important concern
12:52Finally, you need to know what you can learn from this
12:55OK, so let me tell you at the end
12:56what you can take away from watching this episode
12:58Don't let it be like you watched me talk for so long
13:00and in the end don't remember anything
13:01What I want to share with you is three words: the initiative
13:05You should also go think about
13:07whether in your own business
13:08there's any link in the chain
13:10where the initiative is still held in the customer's hands
13:13For example
13:14before the customer places each order
13:15they have to reconsider it all over again
13:16compare prices all over again
13:17be persuaded by you all over again
13:18Then this business of yours is exhausting
13:22You finish this one order
13:23OK, catch your breath for a moment
13:24then you have to do next month
13:26It's just like sales, right
13:27Every month the numbers reset to zero and start counting again
13:30It's exhausting
13:31Right
13:31This is also why multi-level marketing loves to talk about passive income
13:34It's very appealing that way
13:36If every business, every single deal starts from zero
13:40you'll be exhausted
13:41Actually everyone does it this way, everyone's exhausted
13:44But look at what Apple is trying to do now
13:46It's to keep consumers
13:47from having to rethink it every two years
13:49whether I should buy a phone or not
13:50Instead, they have you pay a small sum every month
13:53and when the time comes, you automatically swap to the next one
13:55Then you'll only ask
13:56so I pay an extra 300 bucks a month
13:58and I end up getting a higher-spec version
14:00that seems pretty worthwhile
14:02Spending 50,000 or 60,000 all at once
14:04to buy a top-spec phone
14:05I find that really painful
14:06But if it becomes me spending an extra 300 a month
14:08I wouldn't even think twice
14:09And we already have a similar system in Taiwan
14:11right
14:12Things like sign a two-year contract, pay so much a month
14:13and then if you bundle internet too
14:15pay 2,000-something or 3,000-something a month
14:17and you get a new phone
14:17We've always had this in Taiwan
14:19But for Americans
14:21it might be something very novel
14:22I don't know about that
14:23Let's see if any netizens living in the US can add some context
14:26So you spend a little extra each month and upgrade directly
14:29OK, totally OK
14:30This is also where the subscription model is brilliant
14:31It makes you what
14:32unable to see the total price
14:34You just slowly bleed out
14:35and by the time you're drained, you don't really feel much
14:37It's the same when we do business
14:38We just shouldn't be thinking about
14:39how much I can make on this one order
14:41You need to start thinking about
14:43after a customer walks in
14:44how many transactions can they generate over the next three years
14:48Can you turn a one-time product
14:50into an ongoing service
14:52Can you turn a one-time sale
14:53into a long-term trading relationship
14:55Right now he buys you out in one go
14:56and it's painful for him too, right
14:57He might have to go through
14:58Say you're selling equipment
14:59He has to go to the bank for a loan
15:02And selling it is painful for you too
15:03Because companies that can
15:04pull out that much money all at once
15:06there just aren't that many
15:07See if you can turn it into
15:09something like paying a utility bill
15:11And paying utility bills works like this
15:13It's just hard to notice
15:15So it just keeps getting paid long-term
15:17He won't have to come up with a big sum
15:18So it's like taking the college entrance exam
15:20Comparing every one of your workers
15:21this and that
15:22Now it looks like a monthly payment
15:24Fine, let's just buy it first
15:26So when you do it this way
15:27you make the cost for a customer to leave you
15:29higher than the cost of staying
15:31And then they stay
15:32This sounds a bit complicated, let me give you an example
15:34You've heard this one since you were a kid
15:36Because I heard it since I was a kid
15:38Here we go again
15:39Wang Yung-ching selling rice, right
15:42How did the god of management Wang Yung-ching
15:44Every time I bring up Mr. Wang Yung-ching
15:46there are people down in the comments bashing him about something
15:49Let's not get into that
15:50At the very least, he had his own unique way of doing business
15:53Otherwise everyone opens a company
15:54why is there only one Wang Yung-ching
15:56So we'll still borrow from his wisdom
15:58Let's look at what he did brilliantly
16:00Alright, here we go, Wang Yung-ching, the god of management's rice-selling story
16:04Have you been to that exhibition hall of his in Linkou
16:06They actually built an installation piece
16:07Right?
16:08Anyway, they molded mannequins
16:09acting out that story of him selling rice
16:12How did he sell rice
16:13Subscription model
16:15And back then, what did he use to track the subscriptions
16:17Excel, no way
16:18Back then it was all written down by hand
16:20He would record two numbers
16:22Namely, this customer
16:23Let's say your household
16:24how much rice your household eats in a month
16:26and also your payday
16:27He would deliberately figure out when your rice jar was running low
16:30and it happened to fall on the days you got paid
16:34and deliver the rice right to your door and collect cash on the spot
16:37So you'd never have to set foot in a rice shop again in your life
16:41What Mr. Wang Yung-ching was doing
16:42wasn't the subscription model as we know it today
16:44But he already had
16:45the core spirit of the subscription business model
16:48Right?
16:49You remember the customer's usage cycle
16:51and before they make a new choice
16:53you get your service in front of them first
16:56And it was because of this subscription approach
16:58that Wang Yung-ching got
16:59the first pot of capital that launched the Formosa Plastics empire
17:02Or maybe the capital came from somewhere else, I don't know
17:04But this is the story everyone grew up hearing
17:07and it's brilliant
17:08So let's learn from it
17:10So a brilliant business model
17:12isn't about making customers willing to choose you every time
17:15it's about making sure that next time the customer needs something
17:17they have no other option, you know
17:19They just go, fine, keep it going, that's that
17:21Then you're very hard to replace
17:23You don't want it so that every time the contract is up for renewal
17:25the phone shop lays everything out
17:26all the catalogs, all the phones
17:28and you get put in the market to be picked apart
17:31and it's very hard for you to win
17:33So what if your specs are better and your costs are higher
17:35It's still very hard for you to win
17:36Once you're subscribed today, switching is such a hassle
17:39So you just keep subscribing
17:39It's not much money anyway and you get a new phone
17:41Pretty sweet
17:42So that's that
17:44You can also give it some thought
17:45whether your own business
17:45could possibly develop a subscription model
17:49or something subscription-like
17:51If not, don't ask me what to do
17:53Go ask AI
17:55AI now has that class divide, you know
17:58The AI you pay for really is better
18:00It's not just that they give you more usage
18:02It's genuinely better
18:04So annoying
18:05So doesn't that mean rich people just get richer and stronger
18:07and the AI we middle-class folks use
18:10just can't compare with rich people's AI
18:11So annoying
18:12Alright, that's it for today's story
18:14And feel free to comment below and share
18:16If Apple opened up the subscription model in Taiwan
18:18for hardware
18:19would you buy one?
18:21I'll say it first, I would
18:23And I do read all your comments
18:25I've enabled on this channel
18:26the YouTube channel membership feature
18:28I'll be very direct
18:29I want to ask you to swipe your credit card and support me
18:31so I can put more money and time in
18:33to make the show better
18:35to take the business world
18:36where people succeed or fail in business
18:38and break it all down for you
18:40With failures, we avoid the pitfalls in our own business
18:42With successes, we copy them
18:44The E-commerce Tony Chen Does Your Homework series
18:47is worth joining the channel membership for
18:49Wishing you a thriving business
18:51Wishing you always find a parking spot when you're out driving
18:54Alright, gossip time
18:56Gossip one
18:57There's one thing I looked up while writing the script
18:59I found it, and I think it's pretty interesting, let me tell you
19:01So Apple keeps telling you
19:03that they launched Apple Upgrade
19:04to make it easier for consumers
19:06to afford Apple products
19:07That's what they say, right
19:09But if you go look it up
19:10you'll find there are still products that can't use this plan
19:12And the weird thing is
19:14it's almost always the cheapest version of each piece of hardware
19:17that you can't use it on
19:18and the expensive ones all can
19:19For example, Apple Watch
19:21the cheapest SE version has no subscription
19:23Within Mac
19:24the cheapest in the lineup is called the MacBook Neo
19:27Won't rent it to you
19:28The cheapest entry-level iPad isn't available on subscription either
19:31And like those really old models
19:33The iPhone 16 and 16 Plus are also excluded
19:37Right? How is that mutually exclusive
19:38Apple itself said this program
19:40is meant to lower the barrier to purchase for consumers
19:42So why can't you rent the genuinely cheap products
19:45Let me say this first
19:46Apple hasn't announced the reason
19:48So everything that follows
19:48is me judging a gentleman's heart with a scoundrel's mind
19:51That's all
19:52Personally I think
19:52First, cheap products have thinner margins
19:55And you still have to split part of it
19:57with financial service providers like Klarna
19:59Apple probably figures it's not worth it
20:03Then the second possibility
20:04This is all my own speculation
20:06Apple simply doesn't want
20:08people who were originally willing to pay monthly
20:09to end up as a huge crowd
20:11where ninety percent pick the cheapest product
20:13Then who am I supposed to sell my expensive products to
20:16Why
20:16Because the greatest magic of subscriptions
20:19is making you ignore the total price
20:21Let me say it again
20:22This is the power of the subscription model
20:25The greatest magic of subscriptions is making you ignore the total price
20:30Want to take a look
20:30Netflix charges you every month
20:32and it turns out over the past four years you've
20:34let them charge you every single month
20:35Just take the monthly fee and multiply by 4
20:38If Netflix had offered you a contract back then saying
20:40pay this money for the next four years
20:41and I'll give you 20% off, would you sign
20:43You wouldn't
20:44But paying monthly, you've paid up until now. That's how it works
20:46It makes you ignore the total price
20:48This is worth learning
20:49If you don't have a subscription product, go develop one
20:52Go ask AI how to set one up for you
20:55Just describe your business to it
20:57and tell it to figure something out for you
20:58See if you can come up with some kind of subscription
21:01Even things like
21:03my old e-commerce clients
21:05who sold snacks, imported snacks
21:07would go after employee welfare committees
21:09We'll restock two boxes of snacks for you every month, how about it
21:12The general affairs person usually says sure
21:13because that way they don't have to buy it themselves
21:15And then for holidays when you need offerings
21:16We'll put together an offering set for you too
21:17Subscription model
21:18As long as that company doesn't go under
21:19spending this small amount never hurts
21:21And headquarters saves the hassle
21:22So they'll propose signing up for their service
21:24The subscription model emerges
21:25You might say selling snacks
21:26works pretty well for subscriptions
21:28But what about what I sell, can it work
21:30Go ask AI. That's all
21:32Look, a phone that costs 50,000
21:34you might not be able to bring yourself to buy
21:36But the entry model at 800 a month
21:38and the high-end model at 1,100 a month
21:40Would you buy
21:42Your brain starts thinking, I'm already paying 800 a month
21:44Another 300 and I get the Pro Max
21:48Wow, then I'll spend it
21:49Right
21:50This is Apple Upgrade
21:53On the surface it's lowering your barrier
21:55But what's it actually doing
21:57It's redesigning the way you look at prices
22:01Before it had you compare
22:0230,000 versus 50,000, which do you buy
22:04Now it has you compare a 300 difference per month
22:06You'll think, I should be able to afford that
22:08I shouldn't be that useless
22:09Fine, I want the better phone. And you take it
22:11The total price is hidden behind the monthly payment
22:14The high-end product doesn't seem so expensive
22:16That's how it works
22:17So you see, Apple isn't simply
22:19making it easier for you to buy products
22:21It has designed the menu
22:22Products too cheap to profit from, it leaves off
22:26Every remaining option
22:27is one where it can make a fat profit
22:30This is the subscription technique
22:31that we really need to learn from
22:34The subscription technique doesn't mean
22:35it's all upside
22:37Didn't I do an episode on XBOX
22:40launching that all-you-can-eat game subscription
22:42And it flopped anyway
22:44OK, so go take a look
22:46and see whether the subscription technique works for your own business
22:49Like we always say
22:50when you do business, what kind of business should you do
22:52Do the utility bill kind of business
22:53Why
22:53Everyone just pays, pays until it becomes a habit
22:56Then I won't go under
22:57Isn't that exactly what Chunghwa Telecom is?
22:58Chunghwa Telecom during the Taiwan stock market crash
23:00the one true god, Chunghwa Telecom
23:03Why? Phone bills
23:04Water, electricity, internet, you just pay
23:07It has nothing to do with the economy
23:08Would you be happy being Chunghwa Telecom
23:10Extremely happy
23:12So head in that direction
23:13Don't bet your whole net worth every time you do business
23:16Betting everything on this year's trend
23:19You hit it
23:20And after you hit it
23:20you bet everything again on next year's trend
23:23You'll crash eventually
23:24It's terrifying
23:25While you still have some money on hand
23:27You do, right
23:27You must have made a lot on stocks
23:29So hurry up and start positioning slowly
23:31Slowly pivot yourself toward subscriptions
23:32See if you can start doing this kind of
23:34utility-bill-collecting business
23:36It won't make you filthy rich
23:38but it will make it very hard for you to die
23:40It's like owning a house and collecting rent
23:42You're very hard to kill off
23:44Alright, gossip item two
23:45Next, this thing is maybe even more dramatic
23:48Apple's subscription products this time
23:50Let me tell you what they cover
23:52Here we go, iPhone, the whole video is about it
23:54Apple Watch
23:55I've got one here
23:57Even the Watch needs a subscription
23:58Looking down on me
24:00And then Mac, iPad
24:02All of them can go through hardware subscriptions
24:05So what Apple really wants to do now
24:07is no longer
24:08Charging you the price of a phone every month
24:14Then it might just
24:16become your new utility bill, you know
24:18Right now you pay water, gas, electricity, internet
24:21and then you add one more payment to Apple
24:23Look at the official minimum monthly rates
24:25iPhone is listed at $17.99
24:28Apple Watch starts at $11.99
24:31Mac is $24.99
24:33iPad is $11.99
24:35Add all four together
24:37and it's $66.96 a month
24:40Let's just call it 70 bucks
24:44And I get
24:45this distinguished full Apple set — I'm OK with that
24:48Right?
24:48Suddenly the Android camp
24:50doesn't seem so appealing anymore
24:51Because they don't let me subscribe to laptops either
24:53So I just pay this subscription
24:55and I can get the full Apple set
24:58I pull out the Mac at Starbucks
25:00and then pull out the Watch
25:03and so on
25:03Looks pretty impressive
25:04I didn't find anything about AirPods
25:06Maybe it'll be included too
25:09So how much is that per year?
25:10$803.52
25:12That's one of every product
25:14What I'm saying is, that's pretty cheap
25:17In that case, you know what you can do?
25:19Bundle in your wife and kids too
25:23Otherwise every time they upgrade phones or whatever
25:25you have to shell out big money
25:26Dropping 100k or 200k at a time on upgrades
25:28The whole family swapping phones and computers
25:32And it's not like they're trying to overcharge you
25:33It's not that the original price is 30,000
25:35and you sign a two-year contract
25:36and even though the monthly payment is cheap
25:38you pay and pay and end up paying 40,000
25:40They're not pulling that trick on you
25:42They actually make it cheaper
25:43So that's fine
25:45Anyway, I'm looking forward to it
25:46Once it launches in Taiwan
25:47then it'll become
25:49a permanent fixed household expense
25:52And what about the contract terms for these four products
25:55will they be the same?
25:56Probably not the same
25:57iPhone and Apple Watch
25:58can be leased for one or two years
25:59Mac and iPad for two or three years
26:02So from then on
26:04you never really get a chance
26:05to break away from it all at once
26:08It's just this drawn-out, sticky thing
26:10This one expires today, that one expires next year
26:11and all that
26:13And every time it reminds you
26:15that you could upgrade to a new product
26:17In the past when you bought a computer you'd think
26:18this one still works, I'll stretch it another two years
26:20But once you're in the subscription model
26:22a few hundred more and you can switch to the latest M5 chip
26:25the latest M6 chip
26:27and by two years later the M8 chip is out
26:30That good, huh
26:30Then I'll just swap it out
26:31It's a new machine either way, that's it
26:33Where the old secondhand machine goes, I don't care
26:35That's just how it is
26:37So Apple starts
26:38running a utility-bill business on your household
26:41By then you won't ask
26:42whether you want to buy an Apple product
26:44You'll just tell them
26:44what color do I want this time
26:46Right?
26:47So a hardware subscription can lock people in like that
26:51So enviable
26:51Big company, big resources
26:52There's so much room to maneuver — flexibility, as we say
26:59Apple's margins are so high
27:00Even if they sacrifice a bit of profit
27:01what's the problem with launching this subscription?
27:03And a subscription also locks in future shipment volume
27:07Very nice, really very nice
27:09Personally I think they should have done it long ago
27:11Don't wait until Apple is gradually falling off its pedestal
27:14and only then roll out a subscription
27:15They could have done it from the start
27:17Push the subscription
27:18Pushing a subscription also has a lot of combined effects
27:21you can get
27:21Like how we all complain Siri sucks
27:24Siri AI is still useless and terrible
27:26But once you've subscribed
27:28you just keep using it
27:29That's just how it works
27:29People can't leave
27:31Excellent, really excellent
27:33So enviable
27:34Big company, big resources
27:35So same as always, today my personal take is, think about it
27:39Subscriptions make people overlook the total price
27:41Is there a chance for you
27:42to come up with a subscription model of your own

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