As iPhone Prices Skyrocket, Apple Talks With Goldman Sachs About Buyer Financing Options
The iPhone X is Apple's most expensive smartphone to date, at least in terms of starting price. Potential customers who are interested in the iPhone X are looking at spending $1,000 or more. Goldman Sachs, the investment bank that has raised tens of billions of dollars for Apple, is now reportedly in talks with the company about offering customers financing options when purchasing the high-dollar handset.
Citing "people familiar with the matter," The Wall Street Journal says Goldman Sachs wants to partner with Apple on offering loans to customers purchasing a $1,000 iPhone X, which some may find more enticing than charging to a credit card, many of which charge high interest rates. It's not clear what kind of interest rate(s) Goldman Sachs would command, but it would presumably be less than many credit cards.
Nothing is a done deal and talks could still break down. And of course Apple and Goldman Sachs both have no comment on the matter. If Goldman Sachs could get Apple to agree to a deal, however, it would be a big deal for the company as it tries to grow its consumer bank. Being attached to Apple in the consumer space would go long way towards getting its name out there in consumer circles, whereas currently Goldman Sachs is better known as an investment firm and corporate adviser.
This would not be an entirely unprecedented move for Apple. Back in 2015, Apple partners with Citizens Financial Group to offer zero-interest loans for iPhone upgrades, along with higher interest options for other devices. Sources tell WSJ that part of the talks with Goldman Sachs involves the investment bank taking over at least part of the upgrade program.
Apple is coming off a record quarter in which it collected $88.3 billion in revenue, a jump of 13 percent compared to the same quarter a year prior. Leading up to the earnings report, there was chatter that iPhone X demand was lower than expected. However, Apple basically said its iPhone X was selling like gangbusters.
"We’re thrilled to report the biggest quarter in Apple’s history, with broad-based growth that included the highest revenue ever from a new iPhone lineup. iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November," said Tim Cook, Apple’s CEO. "We’ve also achieved a significant milestone with our active installed base of devices reaching 1.3 billion in January. That’s an increase of 30 percent in just two years, which is a testament to the popularity of our products and the loyalty and satisfaction of our customers."
It's expected that Apple will release a second generation iPhone X sometime this fall.