Apple wants to make it easier to afford pricey products, in talks for new financing deal w...

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Apple and Goldman Sachs are in conversations, which if fruitful, could result in alternate financing options for Apple buyers across the board in the future.




According to a report from The Wall Street Journal on Wednesday, the finance company is looking to expand its arrangements with Apple. Instead of just assisting Apple with debt sale and other financial matters, the company is looking to offer loans straight from Goldman Sachs, instead of a high-interest credit card.

Goldman Sachs has been looking to grow Marcus, its new consumer lending service. Marcus is an online service that offers loans at around 12 percent interest to shoppers during a checkout process -- instead of customers seeking the service out.

Present consumer offerings through Marcus by invitation include no-fee fixed-rate loans from $3,500 and up. It also offers consumer savings, with yields of 1.5 percent -- but Apple is unlikely to involve itself in the latter.

Apple's current iPhone Upgrade Program is funded through Citizens Financial Group and is in essence a zero-interest loan. Other credit options available through Apple are at higher interest rates, from 14.9 percent all the way up to 26 percent.

It isn't clear what effect, if any, a deal with Goldman Sachs would have with Apple's arrangement with Citizens Financial Group.

The Wall Street Journal believes that the talks "are continuing and could still fall apart." Neither Apple nor Goldman Sachs have commented on the matter.
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Comments

  • Reply 1 of 35
    MacProMacPro Posts: 17,291member
    I would have thought Apple could have simply set up their own bank division these days and not involve anyone else.
    trashman69randominternetpersondavenksecmavemufccgWerkswatto_cobrajony0
  • Reply 2 of 35
    Rayz2016Rayz2016 Posts: 3,616member
    MacPro said:
    I would have thought Apple could have simply set up their own bank division these days and not involve anyone else.
    True, but dealing with defaulters is an ugly business. 
    randominternetpersonpatchythepirateStrangeDayswatto_cobrajony0
  • Reply 3 of 35
    airnerdairnerd Posts: 514member
    It would seem more "Apple-like" to instead just price the financing cost upfront to keep it somewhat hidden.  Me personally, and this may just be me, would prefer to pay $49 up front as opposed to being told "your item is $899 and your financing will be at 6% APR".  Bake the payment-plan option price into the purchase price and that seems more palatable.  

    I still would wait to buy it outright, but I hate to see Apple look like a payday loan system or start getting into auto dealership type "now with 0% APR for 60 months with approved credit" type garbage.  
    edited February 7 patchythepiratewatto_cobra
  • Reply 4 of 35
    MacProMacPro Posts: 17,291member
    Rayz2016 said:
    MacPro said:
    I would have thought Apple could have simply set up their own bank division these days and not involve anyone else.
    True, but dealing with defaulters is an ugly business. 
    Or setting fake accounts for commissions ... oh wait we have Wells Fargo for that already ;)
    cgWerkswatto_cobra
  • Reply 5 of 35
    JFC_PAJFC_PA Posts: 172member
    airnerd said:
    It would seem more "Apple-like" to instead just price the financing cost upfront to keep it somewhat hidden.  Me personally, and this may just be me, would prefer to pay $49 up front as opposed to being told "your item is $899 and your financing will be at 6% APR".  Bake the payment-plan option price into the purchase price and that seems more palatable.  

    I still would wait to buy it outright, but I hate to see Apple look like a payday loan system or start getting into auto dealership type "now with 0% APR for 60 months with approved credit" type garbage.  
    Or it could simply be an expansion of their current iPhone Upgrade Program: 0% lease to own or swap. 
    rogifan_newksec
  • Reply 6 of 35
    JFC_PA said:
    airnerd said:
    It would seem more "Apple-like" to instead just price the financing cost upfront to keep it somewhat hidden.  Me personally, and this may just be me, would prefer to pay $49 up front as opposed to being told "your item is $899 and your financing will be at 6% APR".  Bake the payment-plan option price into the purchase price and that seems more palatable.  

    I still would wait to buy it outright, but I hate to see Apple look like a payday loan system or start getting into auto dealership type "now with 0% APR for 60 months with approved credit" type garbage.  
    Or it could simply be an expansion of their current iPhone Upgrade Program: 0% lease to own or swap. 
    Does anyone know what makes that program worthwhile for the bank partner (Citizens Financial Group)?  Is Apple paying the interest?  If not, I don't get it.
    watto_cobra
  • Reply 7 of 35
    JFC_PAJFC_PA Posts: 172member
    JFC_PA said:
    airnerd said:
    It would seem more "Apple-like" to instead just price the financing cost upfront to keep it somewhat hidden.  Me personally, and this may just be me, would prefer to pay $49 up front as opposed to being told "your item is $899 and your financing will be at 6% APR".  Bake the payment-plan option price into the purchase price and that seems more palatable.  

    I still would wait to buy it outright, but I hate to see Apple look like a payday loan system or start getting into auto dealership type "now with 0% APR for 60 months with approved credit" type garbage.  
    Or it could simply be an expansion of their current iPhone Upgrade Program: 0% lease to own or swap. 
    Does anyone know what makes that program worthwhile for the bank partner (Citizens Financial Group)?  Is Apple paying the interest?  If not, I don't get it.
    The bank is totally getting a cut, nobody does business for “free”. And it’s a cut of millions upon millions of transactions. 
    edited February 7
  • Reply 8 of 35
    SoliSoli Posts: 7,362member
    Does this (or any payment plan) really make it easier to afford, or just make it easier to buy?
    lmacairnerdcgWerkswatto_cobra
  • Reply 9 of 35
    jasenj1jasenj1 Posts: 900member
    Another way for people to spend more than they earn and get chained to debt.  :'(
    lmaccgWerkswatto_cobra
  • Reply 10 of 35
    fallenjtfallenjt Posts: 3,833member
    14.9-26% finance? Lol. If your credit is a shit, use cash or don’t buy it. 
    adm1watto_cobra
  • Reply 11 of 35
    Or perhaps people should buy a product they can afford instead of going into debt for no good reason. Oh you lost your iPhone and can only afford one fo the cheap models then get the cheap model and stay out of debt. 
    airnerdwatto_cobra
  • Reply 12 of 35
    foggyhillfoggyhill Posts: 4,665member
    jasenj1 said:
    Another way for people to spend more than they earn and get chained to debt.  :'(
    Yeah, no responsibility in those people at all, no sir, it's all Apple's fault...  You won't make me cry at all.

    You do know also, that people buying phones from telecoms are already incuring an obligation towards them, a contractual debt and they can't walk away too if there is bad service; they are stuck there for 2 years and have to bear it.

    Apple by doing this just wants to seperate buying the phone from where people are using the phone in fact giving people more choice of providers that way you are not stuck.

    It makes the whole industry more competitive.

    Apple can also offer financing that would roll up their own services like Apple Music and the future video service, which they would not be able to do if they had to deal with the telecoms in each country.
    watto_cobra
  • Reply 13 of 35
    SoliSoli Posts: 7,362member
    JFC_PA said:
    airnerd said:
    It would seem more "Apple-like" to instead just price the financing cost upfront to keep it somewhat hidden.  Me personally, and this may just be me, would prefer to pay $49 up front as opposed to being told "your item is $899 and your financing will be at 6% APR".  Bake the payment-plan option price into the purchase price and that seems more palatable.  

    I still would wait to buy it outright, but I hate to see Apple look like a payday loan system or start getting into auto dealership type "now with 0% APR for 60 months with approved credit" type garbage.  
    Or it could simply be an expansion of their current iPhone Upgrade Program: 0% lease to own or swap. 
    Does anyone know what makes that program worthwhile for the bank partner (Citizens Financial Group)?  Is Apple paying the interest?  If not, I don't get it.
    I agree with @JFC_PA. They probably get a direct cut since there is no interest and Apple is directly benefiting from the increased unit sales and additional purchase of AC+ tacked on to the program. I even wonder if Apple is mostly on the hook—not Citizens One—if the customer stops making their monthly payments.
    edited February 7
  • Reply 14 of 35
    radarthekatradarthekat Posts: 2,375moderator
    Hard to understand why Apple would want to do business with a banker/analyst firm that can’t seem to do proper analysis on such a larger and well followed business like Apple.  Goldman just today issued a rating on Apple that spoke on ‘no super cycle’ as though units shipped were the only factor.  No thought of selling phones at significantly higher ASPs, no consideration of Apple’s growing services revenue which tends to get a higher revenue multiple than hardware by investors, and not much consideration given to Apple’s ability to generate outsized cash flows and use that to reduce outstanding shares.  Just, neutral rating on ‘no super cycle.’  Such deep thinkers.

    Unless Goldman is trying to use its analyst clout to play tough guy in negotiations with Apple on revenue sharing.  In that case, I’d walk away from them just on that basis. 
  • Reply 15 of 35
    macguimacgui Posts: 755member
    Soli said:
    Does this (or any payment plan) really make it easier to afford, or just make it easier to buy?
    This ^.  Apple's motivation is obvious, but just making it easier buy Apple kit may not be doing some customers any favors. But it's not Apple's problem... <sigh>

    But for those who do have a disposable income buffer, interest free financing is very nice.
  • Reply 16 of 35
    macguimacgui Posts: 755member
    Soli said:
    I even wonder if Apple is mostly on the hook—not Citizens One—if the customer stops making their monthly payments.
    While Apple could easily write off the losses, I find it hard to believe they open themselves up to that potential liability.
  • Reply 17 of 35
    MacPro said:
    I would have thought Apple could have simply set up their own bank division these days and not involve anyone else.
    Banking/credit is a highly regulated and very competitive industry.
  • Reply 18 of 35
    SoliSoli Posts: 7,362member
    macgui said:
    But for those who do have a disposable income buffer, interest free financing is very nice.
    I take full advantage of it. Same for buying an automobile with a 0% APR. No reason for me to pull my investments out to pay for big ticket items I don't want.


    macgui said:
    Soli said:
    I even wonder if Apple is mostly on the hook—not Citizens One—if the customer stops making their monthly payments.
    While Apple could easily write off the losses, I find it hard to believe they open themselves up to that potential liability.
    Sure, there's always the write-off aspect, and even if Apple is on the line, it seems clear that the benefit of getting a lot more people into iPhones and more expensive iPhones is a win for the company.

    Personally, I hadn't bought the highest capacity iPhone for years, but because of iUP I decided to do so because the additional monthly cost was nominal. I also know several people that wouldn't have bought an iPhone X because of the barrier to entry, but because they were on iUP and because when broken down over 24 payments is only a small monthly bump in price. I'd like to see this happen with the Mac now that they offer AC+ for Macs.
  • Reply 19 of 35
    adm1adm1 Posts: 808member
    fallenjt said:
    14.9-26% finance? Lol. If your credit is a shit, use cash or don’t buy it. 
    I was thinking the same thing, that’s the kinda rates payday loan sharks charge! Apple usually has 0% financing options in the UK, or they did when I bought my old iMac - pay it up at 0% while sticking the unused cash in a 5% interest account... free money. 
  • Reply 20 of 35
    SoliSoli Posts: 7,362member
    adm1 said:
    fallenjt said:
    14.9-26% finance? Lol. If your credit is a shit, use cash or don’t buy it. 
    I was thinking the same thing, that’s the kinda rates payday loan sharks charge! Apple usually has 0% financing options in the UK, or they did when I bought my old iMac - pay it up at 0% while sticking the unused cash in a 5% interest account... free money. 
    Is it? I thought payday loans were monthly rates, so the APR was several times that of the original loan per annum. This seems more inline with credit cards for those with poor credit, no credit history, and department store cards.




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