Microsoft launches 'Surface Plus,' adapting iPhone Upgrade Program concept to PCs

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Microsoft on Tuesday introduced "Surface Plus" and "Surface Plus for Business," two ownership plans that appear to mimic Apple's strategy with the iPhone Upgrade Program.




The standard option lets people buy a Surface computer on a 24-month contract, but upgrade after the 18-month mark as long as they're in good standing, return their previous computer, and sign up for a new 24-month plan. There's also 0 percent APR unless someone takes longer than 24 months to pay, at which point the APR jumps to 19.99 percent.

Shoppers have to sign up for Plus through microsoft.com or a Microsoft Store, at which they get a year of free support. An extended Complete service plan costs extra.

The Business plan comes with Complete for Business, and offers a number of other perks, such as the ability to add multiple devices to a single plan -- including the 55-inch Surface Hub. Customers can choose from 18-, 24-, and 30-month plans, and upgrade as quickly as 12 months on a 24-month contract, or 18 months on a 30-month term. Devices can be added or removed midstream.

For an extra $8.25 per user, per month, the Business plan also offers Office 365 for Business subscriptions.

The iPhone Upgrade Program -- launched in Sept. 2015 -- costs at least $32.41 per month under a two-year contract, but includes a new iPhone every year along with an AppleCare+ warranty. Like Surface Plus, subscribers are required to trade in their old device when they upgrade.

Microsoft has largely abandoned the phone business, but is more directly competing with Apple's Macs by way of the Surface Laptop, the Surface Pro, and to a lesser extent the Surface Book and Surface Studio. There is no equivalent "Mac Upgrade Program."
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Comments

  • Reply 1 of 21
    This is a good idea for PCs. So what if they copied Apple.
    muthuk_vanalingamtmaySolijony0beowulfschmidt
  • Reply 2 of 21
    foggyhillfoggyhill Posts: 4,767member
    Considering they control the license, which in fact costs them nothing, and their are in a monopolistic position, this will undoubtedly wind up in court in the EU at least.
  • Reply 3 of 21
    foggyhillfoggyhill Posts: 4,767member
    This is a good idea for PCs. So what if they copied Apple.
    Its a good idea, but not coming from Microsoft.
    pscooter63StrangeDaysjbdragon
  • Reply 4 of 21
    ceek74ceek74 Posts: 323member
    They're updating their logo too:


    Soligetvoxoarotateleftbyteking editor the gratejony0StrangeDaysjohn.bjbdragonwatto_cobraSpamSandwich
  • Reply 5 of 21
    SoliSoli Posts: 8,492member
    Glad to see this being adopted for CE, but iPUP is a better program. You get to upgrade after only 6 months from your start date and after 12 payments. I also can't find any APR jump if you go over the 24 months. It sounds like you'd just delinquent if you miss your Citizens Bank payments. 


    Like Surface Plus, subscribers are required to trade in their old device when they upgrade.
    This may be confusing. If you payoff the device—which you have the choice to do any time—you aren't required to hand in your device when you sign up again for iPUP. It's yours free and clear. I assume it's the same with MS' program.

    Lots of misconceptions about the service and too many assumed entitlements for simply being offered an additional payment option.


    This is a good idea for PCs. So what if they copied Apple.
    And maybe Apple is the first to offer this on mobile devices, but they certainly aren't the first to offer this sort of program.
    edited August 2017 pscooter63
  • Reply 6 of 21
    foggyhill said:
    This is a good idea for PCs. So what if they copied Apple.
    Its a good idea, but not coming from Microsoft.
    I don't follow. What does being Microsoft have to do with it? The idea is either good, or not.

    As an aside, I really don't see Microsoft as much of an Apple competitor anymore, so what they do is of second-order consequence to anything that Apple might want to do (or does).
    edited August 2017 Soli
  • Reply 7 of 21
    SoliSoli Posts: 8,492member
    foggyhill said:
    This is a good idea for PCs. So what if they copied Apple.
    Its a good idea, but not coming from Microsoft.
    Windows may not be a good idea, but this program seems like a bonus for those that want or need an MS Surface.
  • Reply 8 of 21
    karmadavekarmadave Posts: 299member
    Many businesses routinely lease their laptops, PC's, and servers so this is no big revelation...
  • Reply 9 of 21
    foggyhillfoggyhill Posts: 4,767member
    Soli said:
    foggyhill said:
    This is a good idea for PCs. So what if they copied Apple.
    Its a good idea, but not coming from Microsoft.
    Windows may not be a good idea, but this program seems like a bonus for those that want or need an MS Surface.
    The bad idea is someone who provides the OS, and thus can charge themselves nothing, competing in this way with OEMS.

    The lease/buy part is AOK in general. The only issue is Microsoft doing it unless they allow OEMs to roll over the laptop license eternally from one laptop to a new one. If that's the case, then they will be on the same footing as Microsoft and then its OK for Microsoft to do this. I somehow doubt that would be the case.

    So, this will end up in court in the EU; just watch.
    jbdragon
  • Reply 10 of 21
    ceek74 said:
    They're updating their logo too:


    LOL... Priceless!
    pscooter63watto_cobraSpamSandwich
  • Reply 11 of 21
    macxpressmacxpress Posts: 4,730member
    Perfect since PC's are basically disposable computers anyways...After you remove them from the box 85% of the value pisses itself away. 
    watto_cobramacky the macky
  • Reply 12 of 21
    MarvinMarvin Posts: 14,195moderator
    There is no equivalent "Mac Upgrade Program."
    Not yet anyway. I think it's a good idea to offer it for the Mac too, especially for the Pro hardware. Instead of having to come up with $5k for an iMac Pro, Apple could offer it for $99/month and if it's within 2 years old, you can upgrade it to the latest model by trading it in with a data transfer and continue to pay $99/month, always under warranty. If someone wants to keep the same machine after 2 years, they can keep paying the monthly rate until it's paid up or pay off the remaining balance at once. This saves customers from dealing with the hassle of reselling old hardware on eBay. When Apple gets the hardware back, they can offer it as a refurb, which keeps a healthy supply of those units at price points that are better for poorer areas. 15" MBPs could be about $49/month and 13" around $25/month, which also helps students.

    Apple has a loan system for monthly payments in some regions but this is to pay it up entirely over that period:

    https://www.apple.com/uk/shop/browse/finance/loan

    If they take the machine back then the monthly payments would only have to be the depreciation over that period. Entry level refurbs of Macbooks could go down to ~$600, which would make it a lot easier to choose between that and a cheap PC. A 2 year old Mac is still better than a new PC.

    The program can cross over devices too so desktop users can migrate to laptops or even iPad Pros if they decide they no longer need a Mac. It gets round hardware stagnation where people just hold onto hardware for 8 years or more because they don't need to upgrade. If upgrading was trivial and people got used to doing it then average refresh cycles would improve and the overall userbase can expand with a wider range of price points.

    There's some risk in offering payment plans vs upfront payments but they have enough resources to handle this and they can charge a bit more for the monthly options while still being better value to each buyer.
    radarthekatmacky the macky
  • Reply 13 of 21
    Here's the US version of the above link:
    https://www.apple.com/retail/business/financing/


  • Reply 14 of 21
    rogifan_newrogifan_new Posts: 3,752member
    Hey Apple how about doing this for all your hardware. I’d do Apple as a Service paying a monthly fee to lease my hardware.
  • Reply 15 of 21
    SoliSoli Posts: 8,492member
    Hey Apple how about doing this for all your hardware. I’d do Apple as a Service paying a monthly fee to lease my hardware.
    1) It's not a lease.

    2) You'd really want to buy a Mac at full price over two years and pay full price again and hand in your Mac every year? That sounds pricey since I don't replace my Mac every year. I tend to do with my iPhone, which is why it makes sense.
  • Reply 16 of 21
    SpamSandwichSpamSandwich Posts: 30,581member
    Marvin said:
    There is no equivalent "Mac Upgrade Program."
    Not yet anyway. I think it's a good idea to offer it for the Mac too, especially for the Pro hardware. Instead of having to come up with $5k for an iMac Pro, Apple could offer it for $99/month and if it's within 2 years old, you can upgrade it to the latest model by trading it in with a data transfer and continue to pay $99/month, always under warranty. If someone wants to keep the same machine after 2 years, they can keep paying the monthly rate until it's paid up or pay off the remaining balance at once. This saves customers from dealing with the hassle of reselling old hardware on eBay. When Apple gets the hardware back, they can offer it as a refurb, which keeps a healthy supply of those units at price points that are better for poorer areas. 15" MBPs could be about $49/month and 13" around $25/month, which also helps students.

    Apple has a loan system for monthly payments in some regions but this is to pay it up entirely over that period:

    https://www.apple.com/uk/shop/browse/finance/loan

    If they take the machine back then the monthly payments would only have to be the depreciation over that period. Entry level refurbs of Macbooks could go down to ~$600, which would make it a lot easier to choose between that and a cheap PC. A 2 year old Mac is still better than a new PC.

    The program can cross over devices too so desktop users can migrate to laptops or even iPad Pros if they decide they no longer need a Mac. It gets round hardware stagnation where people just hold onto hardware for 8 years or more because they don't need to upgrade. If upgrading was trivial and people got used to doing it then average refresh cycles would improve and the overall userbase can expand with a wider range of price points.

    There's some risk in offering payment plans vs upfront payments but they have enough resources to handle this and they can charge a bit more for the monthly options while still being better value to each buyer.
    Macs retain their value for far longer than the average PC, plus Apple serves a higher-end market. I doubt they are under any pressure to offer a competing program, nor should they. It would cheapen the entire line.
  • Reply 17 of 21

    Fascinating! The subscription model extending to hardware (yes, Apple is also doing it with the iPhone).

    I guess it makes sense for businesses or freelance pros.

    I wonder if I will be the last of a dying breed that isn't comfortable with the fact that I don't own something I'm using. The world is moving forward and leaving people like me behind!

    tallest skil
  • Reply 18 of 21
    rogifan_newrogifan_new Posts: 3,752member
    Soli said:
    Hey Apple how about doing this for all your hardware. I’d do Apple as a Service paying a monthly fee to lease my hardware.
    1) It's not a lease.

    2) You'd really want to buy a Mac at full price over two years and pay full price again and hand in your Mac every year? That sounds pricey since I don't replace my Mac every year. I tend to do with my iPhone, which is why it makes sense.
    Well there could be different terms depending on the hardware. But yeah if they had an iPhone upgrade style program for iPad and Apple Watch I’d be all over it.
  • Reply 19 of 21
    MarvinMarvin Posts: 14,195moderator
    Soli said:
    Hey Apple how about doing this for all your hardware. I’d do Apple as a Service paying a monthly fee to lease my hardware.
    1) It's not a lease.

    2) You'd really want to buy a Mac at full price over two years and pay full price again and hand in your Mac every year? That sounds pricey since I don't replace my Mac every year. I tend to do with my iPhone, which is why it makes sense.
    I think the US business option is a lease (at the bottom, it mentions options at the end of the lease and continued rental), the UK consumer one is a loan that is paid up but isn't a trade-in so the full product cost is charged over 2 years:

    https://www.apple.com/retail/business/financing/
    https://www.apple.com/uk/shop/browse/finance/loan

    Microsoft is charging the full price over 2 years too, which I don't think makes sense in Apple's case as the product doesn't depreciate that quickly. In Microsoft's case it does.
    Macs retain their value for far longer than the average PC, plus Apple serves a higher-end market. I doubt they are under any pressure to offer a competing program, nor should they. It would cheapen the entire line.
    The products would be the same price, it's just like the iPhone upgrade program. They charge $32.41/month for that so you only pay $389 of a $650 phone, trade it in and get a new one every year. For a Mac, I wouldn't expect people to upgrade every year but every 2 years is ok and they can assume that the device won't depreciate 50% in just 2 years but they can charge 50% over 2 years and when they get it back, they sell it for the remainder as a refurb.

    It makes no difference to Apple really:

    - how it's done now is someone would buy a Macbook for $1299 up-front. They own it for 2 years and it's worth about half:
    http://www.ebay.com/itm/Apple-MacBook-A1534-12-Laptop-MJY32LL-A-April-2015-Space-Gray-Fully-functional-/253050339794
    $765/1299 = 58%, roughly 25% depreciation every year.
    They sell it on eBay and pay 10% fees and the buyer gets a used product, usually without warranty.

    - the alternative would be Apple sells the Macbook for half the price split over 2 years so $650/24 months = ~$29/month. After the 24 months, they paid $696 of a $1299 machine and the machine is worth ~$730. Apple takes it and sells it for $730 or thereabouts. In the 2 years, they have been paid $1426 for a $1299 Macbook but the first buyer didn't have to bother selling on eBay, they only paid for half the machine at a low monthly rate and the second buyer got a good deal on a used MB and knows they can trust buying from Apple.

    There are risks of getting damaged machines back but mostly that will be cosmetic and they can mandate insurance with the monthly option to cover accidental damage and theft. It means more Mac users and that has a knock-on effect for mobile devices. Every device can have a GPS that pings Apple's servers once a day on connection to a network at the firmware level so if people don't pay, they know where the product is.

    Fascinating! The subscription model extending to hardware (yes, Apple is also doing it with the iPhone).

    I guess it makes sense for businesses or freelance pros.

    I wonder if I will be the last of a dying breed that isn't comfortable with the fact that I don't own something I'm using. The world is moving forward and leaving people like me behind!

    It would still be an ownership model, it's just pay-up-to-own vs pay-all-at-once, like with the iPhone (or a mortgage or car payment plan). You can pay it off and keep it, it's not that you'd be renting the hardware.

    Most iPhones have been sold this way since the first model. The carrier buys the phone and sells it to the buyer at a monthly rate including the network cost. You eventually own the phone after paying it up:

    https://www.att.com/cellphones/iphone/apple-iphone-7.html#sku=sku8040300

    If everyone had to buy iPhones by paying the full cost upfront, hardly anyone would have bought them. This is why Ballmer laughed at the iPhone originally because he didn't see that they could easily get round it with the pricing model:

    http://www.businessinsider.com/steve-ballmer-just-praised-apple-2016-11

    "I wish I had thought of the model of subsidizing phones through the operators. People like to point to this quote where I said the iPhones will never sell. Well the price of $600 or $700 was too high and it was business model innovation by Apple to get it essentially built into the monthly cell phone bill."

    People see the $2000+ price tags on Macs and it's too much for people on fixed incomes to save that much, they may only have ~$200 disposable income every month. If they saw an option for $29-45/month, it immediately fits into their disposable income.
    muthuk_vanalingam
  • Reply 20 of 21
    tallest skiltallest skil Posts: 43,399member
    bestkeptsecret said:
    I wonder if I will be the last of a dying breed that isn't comfortable with the fact that I don't own something I'm using. The world is moving forward and leaving people like me behind!
    You’re absolutely not alone. Fortunately, content creators don’t seem to like the rental model, either, so we probably won’t be subjected to this nonsense for much longer.
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