Apple in Talks With Goldman Sachs Over Potential iPhone Buyer Finance Options – Mac Rumors

Apple is in talks with its investment bank Goldman Sachs about the possibility of offering customers financial loans when buying Apple products, according to a report by the Wall Street Journal on Wednesday.

“The Wall Street firm is in talks to offer financing to shoppers buying phones, watches and other gadgets from Apple, people familiar with the matter said. Customers purchasing a $1,000 iPhone X could take out a loan from Goldman instead of charging it to credit cards that often carry high interest rates.”

I have long wondered why Apple doesn’t create their own finance company, the way car manufacturers do. It would help them sell more products, and the risk would be shared over large numbers of purchasers.

Perhaps Apple doesn’t think it is part of their role as a hardware manufacturer, and, if so, that’s understandable, but such a move would allow Apple to cater to a wider range of customers, and save them money.

Source: Apple in Talks With Goldman Sachs Over Potential iPhone Buyer Finance Options – Mac Rumors

12 thoughts on “Apple in Talks With Goldman Sachs Over Potential iPhone Buyer Finance Options – Mac Rumors

  1. In the UK I recently purchased an iPhone 7 and a Mac mini from Apple using finance in partnership with Barclays, has there never been finance offered for US customers or are they in talks to change from one partner to another?

    • Yes, I see that in the UK Apple Store; either with a bank, or via PayPal. But these are still extortionate interest rates. Not sure about how it’s done in the US, but if they can make a deal where purchasers would pay less interest, that would be good.

      On the UK Apple Store, you can currently finance purchases at 14.9% with either Barclay’s or PayPal. I consider that to be an extortionate interest rate; my bank would make me a personal loan at less than 6% these days.

  2. In the UK I recently purchased an iPhone 7 and a Mac mini from Apple using finance in partnership with Barclays, has there never been finance offered for US customers or are they in talks to change from one partner to another?

    • Yes, I see that in the UK Apple Store; either with a bank, or via PayPal. But these are still extortionate interest rates. Not sure about how it’s done in the US, but if they can make a deal where purchasers would pay less interest, that would be good.

      On the UK Apple Store, you can currently finance purchases at 14.9% with either Barclay’s or PayPal. I consider that to be an extortionate interest rate; my bank would make me a personal loan at less than 6% these days.

  3. Given the amount of money Apple had off-shore, they could give away most of their hardware and still make a profit.

    That being said, does it not strike you odd that any company that produces limited lifespan consumer goods needs a finacial arm? Did I take out a loan for my refrigerator? Yes, but that was more than a decade ago. If I get three years from an Apple product, I consider it a win. I am not sure that I will be upgrading when this device dies.

    • Automakers do it, and have done so for decades. Yes, a car is more expensive, but anything they can do to lower prices to consumers would be a plus for them, and for the consumers. If they can use their weight to make $1,000 iPhones cost less in the long run, then they’ll sell more $1,000 iPhones. 🙂

      Personally, I’d be more likely to upgrade my current iMac, that I use for my one-person business, if they had financing at a “normal” rate, especially if it were treated like a lease (for accounting reasons).

  4. Given the amount of money Apple had off-shore, they could give away most of their hardware and still make a profit.

    That being said, does it not strike you odd that any company that produces limited lifespan consumer goods needs a finacial arm? Did I take out a loan for my refrigerator? Yes, but that was more than a decade ago. If I get three years from an Apple product, I consider it a win. I am not sure that I will be upgrading when this device dies.

    • Automakers do it, and have done so for decades. Yes, a car is more expensive, but anything they can do to lower prices to consumers would be a plus for them, and for the consumers. If they can use their weight to make $1,000 iPhones cost less in the long run, then they’ll sell more $1,000 iPhones. 🙂

      Personally, I’d be more likely to upgrade my current iMac, that I use for my one-person business, if they had financing at a “normal” rate, especially if it were treated like a lease (for accounting reasons).

  5. Kirk wrote: “…the way can manufacturers do.” I don’t know a lot about the canning industry, but I agree with your comparison to automakers. If Apple could take over the financing and add the 6% that Kirk mentions for his personal bank loans to their profits, would that pay for the risks, costs, and hassles of being a financing company?

    The Apple Upgrade program in the USA, which partners with a bank, amounts to a lease, and has a palatable monthly fee for a lot of people, similar what they had been trained to pay monthly for the so-called subsidized purchases of phones by the big carriers. I don’t know how you would calculate the effective interest rate of equivalent financing, but my memory is that the loan documents claim a 0% interest rate.

    In researching my comment here, I found several sites that argued for me being my own finance company. If I can verify their calculations, I will switch the way I buy my iPhones. They say that if I buy my phone outright, and sell it after 1 year, I will spend about $175 a year for the phone. That’s certainly better than the ~$30/month of the carrier’s subsidizing or financing plans, and still cheaper than keeping a phone for three or four years, as I have been doing. Adding AppleCare Plus makes a significant difference to the calculation, but I like to have it, and I can’t buy it after my phones age past two years.

    One article recommended buying and selling phones on Swappa https://swappa.com/buy/iphones Kirk, I think you have mentioned selling used Apple equipment on eBay. How does that compare with Swappa and other options?

    • Damn, typo. Fixed. 🙂

      I buy my phones outright, but my business pays for them, and I get back the VAT, and I have the money to be able to do so. I understand that many people can’t do that.

      I’ve sold stuff on eBay, but never through one of those companies that buys things from you. If you factor in eBay’s fee – 10% – PayPal’s fee, the time you spend worrying, shipping, etc, it could be a lot easier. But whenever I’ve checked a phone of mine, the price they offer is way too low.

      I recently sold a 2 1/2 year old 12″ MacBook on eBay for around £600. I think I paid about £1000 for it, and a buyback company was offering me £100. But for, say, a one-year old iPhone, the money offered might be better.

  6. Kirk wrote: “…the way can manufacturers do.” I don’t know a lot about the canning industry, but I agree with your comparison to automakers. If Apple could take over the financing and add the 6% that Kirk mentions for his personal bank loans to their profits, would that pay for the risks, costs, and hassles of being a financing company?

    The Apple Upgrade program in the USA, which partners with a bank, amounts to a lease, and has a palatable monthly fee for a lot of people, similar what they had been trained to pay monthly for the so-called subsidized purchases of phones by the big carriers. I don’t know how you would calculate the effective interest rate of equivalent financing, but my memory is that the loan documents claim a 0% interest rate.

    In researching my comment here, I found several sites that argued for me being my own finance company. If I can verify their calculations, I will switch the way I buy my iPhones. They say that if I buy my phone outright, and sell it after 1 year, I will spend about $175 a year for the phone. That’s certainly better than the ~$30/month of the carrier’s subsidizing or financing plans, and still cheaper than keeping a phone for three or four years, as I have been doing. Adding AppleCare Plus makes a significant difference to the calculation, but I like to have it, and I can’t buy it after my phones age past two years.

    One article recommended buying and selling phones on Swappa https://swappa.com/buy/iphones Kirk, I think you have mentioned selling used Apple equipment on eBay. How does that compare with Swappa and other options?

    • Damn, typo. Fixed. 🙂

      I buy my phones outright, but my business pays for them, and I get back the VAT, and I have the money to be able to do so. I understand that many people can’t do that.

      I’ve sold stuff on eBay, but never through one of those companies that buys things from you. If you factor in eBay’s fee – 10% – PayPal’s fee, the time you spend worrying, shipping, etc, it could be a lot easier. But whenever I’ve checked a phone of mine, the price they offer is way too low.

      I recently sold a 2 1/2 year old 12″ MacBook on eBay for around £600. I think I paid about £1000 for it, and a buyback company was offering me £100. But for, say, a one-year old iPhone, the money offered might be better.

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