Why Apple is betting on selling security as a service


The march to subscription – everything continues, from streaming services to car features, and now even your personal well-being, with recent announcements from Apple laying the groundwork for a new type of subscription: security as a service.

On September 7, the tech company announced Emergency SOS via Satellite, a new feature available on its latest iPhones that connects users to emergency services via a hardware-integrated satellite antenna. Apple said the service would be free for two years, but didn’t say how much it would cost after that. Apple did not respond to a request regarding future pricing.

Analysts say the company is building on its existing health and fitness credibility and themes, especially after the success of the Apple Watch as a fitness-focused device. The big question Apple is betting on is whether security alone will be a big enough driver to attract customers to a subscription-like service. Consumers may end up being attracted to the range of services available on the iPhone, in addition to emergency SOS.

“We’ve generally found in our work that consumer upgrades are driven more by a feature set,” said Samik Chatterjee, hardware analyst at JPMorgan. “When you think about what Apple brings with its ecosystem, there’s a lot of convenience of using the hardware but also the services that you can consume on it, now including security.”

People visit the Apple store at the Cumberland Mall in Atlanta, Georgia, U.S., May 3, 2022. REUTERS/Alyssa Pointer

A potential security subscription would be bundled with a variety of other wallet-depleting Apple offerings, including Peloton competitor Apple Fitness (which runs at $9.99 per month), its own in-house streaming service, Apple TV + and its curated games subscription, Apple Arcade at $4.99 per month. The company also offers a bundled version, the Apple One at $14.95 per month, for its most dedicated subscribers, and even offers hardware as a subscription through the iPhone Upgrade Program, which promises subscribers the latest iPhone every year for $39.50 per month. .

The concept of security subscriptions is not entirely new. Automaker General Motors has long offered its OnStar service for vehicles, starting at $24.99 per month, which allows subscribers to call emergency services. And navigation-focused rival Garmin sells safety call subscriptions for its satellite-enabled devices – which come with an easy-to-trigger SOS button. Garmin’s inReach satellite subscription plan currently costs $14.95 per month.

There are obvious overheads for Apple in providing emergency SOS via satellite. At the tech company’s “Far Out” fall product launch event, Apple unveiled new iPhones equipped with satellite antennas that could contact emergency services without using a cellular network.

A guest looks at the new iPhone 14 during an Apple event at its headquarters in Cupertino, California, U.S., September 7, 2022. REUTERS/Carlos Barria

A guest looks at the new iPhone 14 during an Apple event at its headquarters in Cupertino, California, U.S., September 7, 2022. REUTERS/Carlos Barria

The devices prompt users to send a specially formatted text message via satellite to an Apple-staffed center that calls for help on the user’s behalf. The service will initially be available to users in the United States and Canada from November, when the first devices equipped with the new antennas are released.

For Apple, whose previous offerings have all been decidedly more mainstream, a subscription focused on the personal safety of its users is still based on user buy-in.

“The average consumer, even if it’s an outdoor person who would go to areas without cell service, it’s going to take a little while for people to figure that out,” says Ryan Reith, vice president of consumer devices at IDC Group.

However, Reith says Apple’s SOS feature could lay the groundwork for wider use of satellites to communicate beyond emergencies – and use security to convince users to pay for the service once the two-month period expires. years expired. “I see this as the very first step in what they’re looking to do to leverage satellite communications for their device.”

The hook for consumers could be in the trial period. “Two years free makes perfect sense,” says Reith. “Anyone will take anything for free.”

Mike Juang is a senior producer at Yahoo Finance. Follow him on Twitter at @mikejuangnews.

Click here for the latest tech news, reviews and helpful tech and gadget articles

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app to Apple Where android

Follow Yahoo Finance on Twitter, Facebook, instagram, Flipboard, LinkedInand Youtube


About Author

Comments are closed.