Apple Forecasts Slower Services Growth as AI Costs Rise

Apple is signaling a strategic shift in its Services division that could impact how your customers pay for hardware and digital access. As the company rolls out its new 'Apple Intelligence' features, it is preparing to move toward a tiered subscription model. For retailers, the most important development is the potential change to the Apple ecosystem's cost of ownership. Apple has long used services to drive loyalty, but rising cloud costs are forcing them to look at new revenue streams, including paid AI tiers. This shift likely means more focus on 'Apple Pay' and 'Apple Card' integration to facilitate these recurring payments. If you rely on Apple Pay for your checkout process, expect to see Apple pushing more aggressive financing options to help consumers offset the cost of new AI-capable hardware. The company needs users on the latest devices to run these features, which usually results in increased promotion of their monthly installment plans. Operators should prepare for a holiday season where hardware sales are bundled more tightly with software subscriptions, potentially changing how you pitch device affordability to your customers.

Source: PYMNTS

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