The Schiller exit is a bit more notable. Unlike Maestri, he still had a real job: The veteran executive ran the App Store and Apple Events. The App Store portion alone is no joke. It generates an estimated $30 billion a year and can be very challenging to manage. Apple’s app marketplace is loved by many consumers, but often criticized by developers and subjected to increasingly onerous regulations. It was a busy, all-encompassing gig and nowhere near a semiretirement.
[…]
But there’s a bit more to the story, I’m told. Ternus and services chief Eddy Cue want to make even more money from the App Store and figure out ways to raise margins and squeeze additional recurring revenue from the platform. Schiller, on the other hand, seems to believe that such moves will only further irk developers and governments. While there was no internal blowup or anything like that, it’s something he wanted no part of.
“Product guy” dreams about margins, forgets that people buy Apple hardware because of the software.
Apple admitted during its July earnings call that regulatory changes have started to weigh on its Services growth. Apple reported services revenue of $30.7 billion for the June quarter, a record for the period but short of the $31.4 billion that analysts expected.
The Company posted quarterly revenue of $109.4 billion, up 16 percent year over year.
[…]
“Today, Apple is proud to report our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment,” said Tim Cook, Apple’s CEO.
You can’t argue with the strong iPhone and Mac sales figures, and Apple specifically called out the MacBook Pro and the MacBook Neo, which Cook said “has been especially popular” and suggested that the company is still struggling to make them fast enough.
It’s admirable (and sensible) that Cook isn’t pointing fingers at anyone but customers who want Apple products, but the key phrase in his statement is “the supply chain just has less flexibility in it than normal.” This is an acknowledgement that while in the past, Apple might have been able to boost chip production from its partners, today the chip industry is maxed out thanks to the wild building of chips for AI applications.
[…]
As an aside, Cook also alluded to reports that Apple has tried to get the U.S. government to authorize purchase of RAM from some forbidden Chinese chipmakers, which has aroused political ire.
Apple today announced Apple Upgrade, a new product leasing program provided by Klarna for iPhone, Apple Watch, Mac, and iPad available on the Apple Store online, in the Apple Store app, and at Apple Store locations in the United States.
[…]
Apple Upgrade offers 12- and 24-month leasing options for iPhone and Apple Watch, and 24- and 36-month leasing options for Mac and iPad. Leasing prices start as low as $17.99 per month for iPhone, $11.99 for Apple Watch, $24.99 for Mac, and $11.99 for iPad.
The $17.99/month gets you a base model iPhone 17e for 24 months. This is a total of $431.76 vs. $599 for buying a new one today, but then you have to make a decision:
At the end of the lease term, customers can upgrade their device to the latest generation, purchase it with a one-time payment, or simply return it and exit the program.
I used to get a new phone every other year, but I kept my iPhone 12 mini for three years and will likely keep my 15 Pro for four years. In addition to making it easier to buy phones without the up-front payment, Apple is probably hoping this will encourage more customers to get back on the two-year cycle. Given the choice between continuing a small monthly payment and getting a new phone or making a larger payment to keep their old phone, many may opt to upgrade.
The payoff amount is the difference between what was paid during the leasing period and the retail price of the device, minus any remaining trade-in credits. Klarna is not charging a fee for the leasing program, so an iPhone that’s $1,099 can be leased and then purchased for $1,099 with no extra cost beyond taxes.
I guess this means that, for a bit of hassle, you can essentially buy the device for the list price at 0% interest.
Lease participants can opt to end a lease early and return a device, but Apple says there may be “substantial fees” for terminating a lease before the end of the term.
[…]
Customers must upgrade, end the lease, or purchase the device at the end of the lease term. If that doesn’t happen, the lease converts to a month-to-month lease for up to six months.
[…]
Damage to an iPhone, losing an iPhone, or having an iPhone stolen could incur fees.
The rollout of the program comes as Apple has been struggling with supply chain issues related to “RAMageddon,” which refers to the industry-wide shortage of memory chips that is driving up the price of hardware. As a result, Apple recently announced price hikes for its Mac and iPad lineups, sparing the iPhone for now. The new Upgrade program seems to be Apple’s answer to making those higher prices more manageable for consumers.
Customers can manage their lease directly in the Klarna app, where they can view their billing schedule and track remaining payments.
With the launch of the new Upgrade program, Apple is discontinuing its existing in-house financing and installment programs in the U.S., which include the iPhone Upgrade Program and iPhone Payments.
For iPhones, you have to have a carrier and can’t use a prepaid plan.
[…]
For iPads, the starting prices range from $12.99/month to $24.99/month, Macs range from starting prices of $24.99/month to $48.99/month, and the Apple Watch ranges from starting prices of $11.99/month to $47.03/month. But again, these are just starting prices. You can configure a fully loaded 16-inch MacBook Pro that is just under $230/month, and it won’t include AppleCare.
As a point of comparison, under the current program that is being discontinued, I pay $69.50/month for an iPhone 17 Pro Max, but I have a 512GB model, so my lease price for the same phone would be $40.83/month, significantly lower, but keep in mind that doesn’t include AppleCare+, which would add $13.99/month or $139/year for that iPhone. On a monthly basis, that puts a new iPhone 17 Pro Max with 512GB of storage and AppleCare+ at just under $55/month. Still a superior deal, but not nearly as good as the landing page might initially lead you to believe.
[…]
If you lease accessories for your device, those don’t have to be returned. Why? Presumably because they have no value to Apple or Klarna.
9to5Mac can now confirm that code found in the iOS 27 beta appears to reveal a broader system for managing a financed iPhone, including the ability to restrict apps and services when payments are missed.
The code describes a system called App Managed Features, which allows an authorized financing or provider app to enroll an iPhone and perform ongoing status checks.
If the contract is no longer in good standing, Apple’s system services can place the iPhone in “Restricted Mode,” which blocks access to most apps until the payment or contract issue is resolved, while keeping a small set of apps available.
I bet there are some governments that would love to commandeer that for their own purposes.
Finally, the new framework also introduces a new type of activation lock called “Partner Finance Lock,” which is meant to prevent users from erasing, reselling, or stripping a restricted device for parts.
Apple says it won’t limit the capabilities of devices leased through its new Upgrade program if you miss a payment. In an emailed statement to The Verge, Apple spokesperson Brian Bumbery says, “There will be no restricted mode and/or there will be no limitations put on device functionality due to missed payments or default with the Apple Upgrade program.”
One possibility is that it was developed for financing programs offered by carriers, retailers, or other partners outside Apple Upgrade, potentially including markets where device restrictions are already used to enforce installment agreements.
Here’s a breakdown of how much you’d pay for the devices included in the Apple Upgrade program, as well as how much more you’d pay to purchase the devices outright at the end of your lease[…]
[…]
Klarna doesn’t say what will happen if you don’t pay the outstanding balance.
[…]
During the lease, Klarna owns your device. You’re responsible for any damage, and will get charged a fee if you don’t return the device in “good condition.” That’s why Apple is encouraging customers to sign up for an AppleCare subscription that could drive up the cost of your lease even more.
[…]
Apple also notes that you’ll have to pay an early termination fee if you want to return the device before your lease ends or if you want to upgrade early.
The Apple Card Monthly Installments aren’t going away, so I’ll keep using that.
[…]
When you finance using the Apple Card Monthly Installments, you pay a fixed amount to own your device. There are no savings here — aside from the 3% cashback — the monthly payment is the purchase price divided by either 12 or 24 months.
When you lease an iPhone through Apple Upgrade, you need a cellular account on one of the big three U.S. carriers: AT&T, T-Mobile, or Verizon. That kind of stinks, and I’m not quite sure I understand why.
The iPhone upgrade program always required it. For a time you could do Apple Card installments without a carrier if you bought it online but never in store. I assume there is carrier pressure to tie the phones to the carriers. Activating iPhones on carriers was a key metric at the Apple Store.
Credit-risk assessment is seemingly part of it. There’s a lot of fraud in iPhone purchases specifically and cell phone service generally. The big three carriers do a significant amount of risk assessment before letting you open a new postpaid account; that you have an active account with one of them is a signal that you’re not trying to lease an iPhone using phony credentials in order to sell it.
But the bigger reason is the complex nature of the contracts between Apple and each of the big three carriers.
This to me is proof that Apple leadership is suffering from cognitive dissonance over their slide into advertising. They’re conflating cause and effect. The Apple brand stands for high-quality superior user experiences because the devices and software Apple makes traditionally deliver high-quality superior user experiences. The work Apple ships is what makes the brand what it is. But now they’re stricken with the mindset that it’s the Apple brand that makes something a high-quality superior experience.
[…]
If you refuse to admit that the ads make these services worse, you also can’t admit that there’s a reason to offer an ad-free experience. So the thinking is something like “Apple always focuses on the user experience, and never deliberately makes the user experience worse. Therefore, if an Apple service shows ads, those ads are high quality and don’t detract from the quality of the product or the experience of using it. Therefore, there’s no reason to offer users a paid ad-free tier, because there’s no reason to want to avoid Apple’s ads.”
What a brand stands for can change over time. It’s eventually determined by the products, not the mantras.
“It just works.”
“A thousand no’s for every yes.”
“What happens on your iPhone, stays on your iPhone.”
I feel bad admitting it, because some of my friends are betting on iAd revenue to feed their family, but I’m just not on board with Apple running an advertising network. I don’t want to see ads in my apps, and I don’t want Apple to ever lose even a little of what it means to be a product-driven company.
The whole thing is funny because at a fundamental level we all just know in our bones that Apple never even considered putting “Intel Inside” stickers on Macs.
[…]
Apple still treats its hardware with that level of respect. With reverence. iPhones don’t even say “iPhone” on the hardware. No model or serial numbers. No small print. Just an Apple logo on the back.
[…]
Putting themselves in customers’ shoes today, how many ads do Apple’s executives want stuck in the results when they search for an app in the App Store? We know the honest answer. But the answer evidenced by the actual App Store is “Two really big ones, including one in the first spot.”
While Apple can spin adding ads to Apple Maps as a revolutionary new way for businesses to be discovered, it’s telling that its initial announcement was hidden inside a press release about an entirely different product, and introduced as “Enhanced Discoverability in Apple Maps.” Those choices show that this isn’t something Apple is actually proud of—and that the people in charge of communicating and explaining Apple’s decisions to the world are at odds with those who are making the decisions about expanding revenue.
[…]
To this day, you’re confronted with an ad for Creator Studio every time you create a new document in those apps, and their default toolbars contain buttons that won’t work unless you subscribe to the bundle. As a result, Apple has essentially turned its free productivity suite—software that was designed to enhance the inherent value of Apple’s products—into a freemium package with upsell to a creative professional subscription bundle that’s irrelevant (and a terrible value!) for most of its existing users.
[…]
There are many more examples. Using notifications to promote subscriptions and badging the Settings app to push AppleCare plans are among the ways Apple has chosen to intervene in the user experience to drive revenue. I’m actually not opposed to the idea that Apple should communicate opportunities for its customers to get more out of their devices—but it should be careful not to cross the line into actively annoying those customers. If someone doesn’t want to see what you offer, you need to accept that and go away—not keep needling them. Apple often falls on the wrong side of that line.
[…]
It makes me wonder if the people making these decisions at Apple have lost track of the Apple brand and what it stands for.
What Snell’s column makes clear is that the incremental revenue Apple is gaining from putting shitty ads in its software comes at a price. They’re withdrawals from Apple’s brand equity. And I would argue that the value they’re detracting from the brand far out-values the dollar amount they’d padding to Apple’s bottom line.
[…]
If your competitors’ stores all smell like dogshit, don’t aim to have the store that smells the least like shit. Aim to have a store that smells pristine. “Our stores only carry a vague whiff of dogshit” is not insanely great.
The people haven’t changed, but Apple has. Strong leaders inevitably shape the personality — the spirit — of organizations over time. Apple in 2011 was peak Steve Jobs Apple. Apple in 2026 is peak Tim Cook Apple. But it was Cook who popularized the “you’re not the customer, you’re the product” argument against “free with ads” online services. But that was in 2014.
“Slippery slope” is a perfect term. But I wanted to add something here. In my experience, in the realm of UI, there is no middle notch. I’ve seen it time and time again… the moment you open the door to One, Infinity starts exerting its pull[…]
I HATE, HATE, HATE having ads pop up when I’m trying to do something else. It’s bad enough on Web sites where at least they have the excuse of having to make money some how but it rises to intolerable when they put them up on a device I’ve already paid for.
The annoyance is reason enough to dislike Apple’s ads but for me the worst thing is that they’re corrupting and inevitably lead to the user being replaced by the advertiser as the customer.
The price increases for Apple Music come after Spotify announced its own round of price hikes earlier this year, which Apple poked fun at on social media. Even with today’s price hikes, though, Apple Music remains cheaper than Spotify.
Apple Music no longer makes sense when I’m already paying for YouTube Premium. Apple Music goes up to £11.99, YouTube Premium is £12.99 and on top of a good music service you get no ads on YouTube.
Distilling my longtime argument down to its simplest bit, I’d ask “do you want to pay $10 a month for music for the rest of your life?”
But truly, it was never going to just be $10 per month. The price was going to go up over time. It was going to get more expensive to have access to the same music.
If you purchase your music, though, I think most people would reach a point in their life where they stop buying new music entirely or they’re only buying a few albums per year. The cost of music would go down for you over time.
That was my thinking, too, but then I found that music I’ve purchased from Apple won’t work on my HomePod. I refuse to condone that behavior, so now I have two solid reasons not to subscribe to Apple Music.
While the monthly and annual prices of AppleCare+ plans for Macs and iPads received a slight increase this week, AppleCare One continues to start at $19.99 per month in the U.S., making the multi-device plan even more valuable.
Some of [Cook’s letter] remains true, but has lost some truthiness — and truthiness matters. But some of it is no longer true, period. It’s no longer just “one small part” of Apple’s business that serves advertisers. Here in 2026, search results in the App Store not only show paid ads — frequently for casinos — but the search results are visually dominated by paid ads now that Apple has added a second ad to results. Apple News+ is a paid subscription that offers a genuinely great value for the number of paywalled publishers whose content it includes, but articles on the News app tend to include the weirdest AI-generated ads on the Internet. (How many young blond women am I supposed to believe need hearing aids?) And — at this writing, still “coming soon” — Apple is launching ads on Apple Maps. Apple Maps remains free of charge to use, so according to Tim Cook, we’re not the customer. We’re the product. Or, if you prefer, our frustration is the product.
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The ratio of ads to organic results in App Store search — especially when measured in screen area — is clearly not aligned with Cook’s 2014 statement that “Our software and services are designed to make our devices better. Plain and simple.” Obviously not. App Store search today is designed primarily to generate more revenue for Apple. That’s not criminal, but it’s a change.
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What gave Tim Cook’s privacy letter heft in 2014 wasn’t just the clarity of its plain language, but the fact that you didn’t have to take his word for it that the ads Apple showed you respected your privacy, because Apple didn’t show you ads in 2014. Apple today can’t say that.
[…]
John Ternus should return Apple’s privacy policy to its 2014 clarity. The trust Apple would earn from such a move would far out-value whatever revenue these ads pad to their already hefty and ever-increasing quarterly Services numbers.
I wish that were the case, but I fear this is kind of a Hotelling’s Law situation, where Apple can get most of the benefit by being just slightly better on this axis. Where else do its customers have to go?
In the second fiscal quarter of 2018, services generated $9 billion in revenue (net sales), whereas in Q2 2026, that amount had grown to $31 billion! In this blog post, I want to focus on understanding the relative financial importance of products and services for Apple.
[…]
In 2025, services were 42% of Apple gross margin. How does 26% of net sales become 42% of gross margin? The explanation is that services have a much lower cost of sales. The products gross margin was 37% of products net sales, while the services gross margin was an astonishing 75% of services net sales. In other words, Apple services are almost pure profit!
Does this 75% account for TV and movie production costs?
With persistent general inflation, consumers do not have unlimited money to spend on Apple products. At least in the near future, it’s reasonable to question how much further room is available for growth in profits from Apple products. To satisfy the demands of investors, Apple executives including CEO-elect John Ternus may be forced to rely even more than before on growth in services, which do not face as much pressure on cost of sales as hardware products.
AppleCare+ pricing has gone up for new Mac and iPad customers, adding another small cost increase to the Apple ownership equation. According to Bloomberg, Apple has raised monthly and annual AppleCare+ rates for new Mac and iPad plans, with the change applying to new coverage rather than existing plans already active on customer devices.
The increase is modest on paper. Reports indicate Apple has raised monthly AppleCare+ rates by 50 cents and annual plans by $5 for affected Mac and iPad products. For example, AppleCare+ for the 13-inch MacBook Air is now listed at $7.99 per month or $79.99 per year, up from $7.49 per month and $74.99 per year. The Mac mini now starts at $4.49 per month or $44.99 per year, while the 16-inch MacBook Pro costs $15.99 per month or $159.99 per year.
The numbers are not dramatic alone. The context is harder for buyers. Mac and iPad prices have already been under pressure from component costs, financing changes and longer upgrade cycles. AppleCare+ is optional, but for many customers buying expensive laptops and tablets, it is part of the real purchase price.
AppleCare+ Pricing Adds to the Ownership Cost
AppleCare+ pricing is one of those costs many buyers do not fully consider until checkout. The device price gets attention first. Then come storage upgrades, cellular connectivity, keyboard accessories, Apple Pencil, taxes, financing, software subscriptions and protection coverage.
For a MacBook Air, an extra 50 cents per month may not change the decision. For a MacBook Pro, iPad Pro or a family buying multiple devices, the increases add up over time. Annual plans rising by $5 also signal that Apple is comfortable nudging protection costs higher even when the change is small enough to avoid a major backlash.
AppleCare+ remains valuable for users who carry devices daily or depend on them for work. Macs and iPads are portable, expensive and often used in places where accidents happen: classrooms, coffee shops, airports, offices, studios, kitchens and family rooms. A cracked iPad screen or damaged MacBook display can be expensive without coverage.
Apple’s pitch is convenience as much as insurance. AppleCare+ includes priority support, battery service when capacity drops below Apple’s threshold, and reduced service fees for accidental damage. For iPad, AppleCare+ can also cover Apple-branded keyboard accessories and Apple Pencil damage under service-fee terms.
That makes the plan attractive. It also makes the higher price easier for Apple to defend.
Image Credit: Apple Inc.
New Customers Feel the Change First
The latest increase applies to new Mac and iPad AppleCare+ customers. Existing customers with active plans are not the immediate target of the reported change. That distinction helps Apple avoid angering subscribers who already signed up at previous rates, while still lifting revenue from new device buyers.
This approach fits Apple’s broader shift toward recurring coverage. Apple has been moving AppleCare+ further into monthly and annual subscription-style plans, with AppleCare One offering a bundled option for multiple products. The protection plan is no longer only a one-time add-on at purchase. It is increasingly part of Apple’s services layer.
That matters because Apple’s services business depends on recurring payments. AppleCare+ may not get the same attention as iCloud, Apple Music or Apple TV, but it is another way Apple extends the customer relationship beyond the hardware sale. A Mac or iPad purchase becomes not only a device transaction, but also a support and repair subscription.
The price increase strengthens that pattern. A small rise across a large base of new buyers can support services revenue without changing the product lineup.
Mac Buyers Should Compare Plans
Mac buyers now have more reason to compare AppleCare+ options before adding coverage. Apple’s Mac plans vary by model because repair risk and device cost vary. A Mac mini plan starts lower because the device is stationary and less likely to face drops or screen damage. A 16-inch MacBook Pro costs more because it is a high-value portable machine with expensive components.
For a buyer choosing a MacBook Air, AppleCare+ may be easier to justify if the laptop travels daily. Students, journalists, consultants, photographers, editors and business travelers are more exposed to accidental damage than someone who leaves a Mac mini on a desk.
For MacBook Pro buyers, the decision often depends on work dependency. If the Mac is the primary income tool, AppleCare+ can be less about repair math and more about reducing downtime. Access to Apple support and lower repair costs can be worth the subscription if the device is central to daily work.
Still, users should compare the plan cost with their own risk. A careful desktop Mac user may not need the same coverage as a frequent traveler. AppleCare+ is useful, but it should not be automatic for every buyer.
iPad Buyers Face a Different Calculation
iPad AppleCare+ has its own logic because iPads are more physically exposed than Macs in many homes. They are passed between family members, used by children, carried around the house, taken to school, placed in bags and paired with accessories that raise the total cost of ownership.
For iPad Pro and iPad Air buyers, AppleCare+ can make sense because screen repairs and accessory damage can be costly. Apple’s current AppleCare+ terms for iPad include service fees for screen damage, other accidental damage and covered accessories. That can make the plan appealing for users who buy Magic Keyboard, Apple Pencil Pro or a high-end iPad Pro.
The decision becomes more complicated for entry-level iPad buyers. A lower-cost iPad may not justify years of coverage for every user, especially if it stays mostly at home. Families, however, may see the protection differently. An iPad used by children faces more risk than a laptop used carefully by one adult.
The new pricing does not change the core question. It makes the answer slightly more expensive.
AppleCare Products | Warranty Check
AppleCare One Becomes More Relevant
AppleCare One gives Apple another way to soften individual plan increases. The bundle starts at $19.99 per month for up to three eligible products, with additional devices available for $5.99 per month each. It includes AppleCare+ benefits and adds theft and loss coverage for eligible iPhone, iPad and Apple Watch products.
For users with only one Mac or one iPad, AppleCare One may not be the best fit. For users with multiple devices, it can become more attractive as individual plans rise. A person with an iPhone, iPad and Mac may compare three separate AppleCare+ plans against the bundle and find the monthly difference easier to justify.
That is likely part of the strategy. Apple can raise individual plan prices modestly while giving heavier ecosystem users a bundled option. The company has used similar logic across services with Apple One, where the value increases as users subscribe to more Apple products.
The same principle now applies to protection. The deeper a customer is inside Apple’s hardware ecosystem, the easier it becomes to turn support coverage into a monthly bundle.
Small Increase, Larger Signal
AppleCare+ pricing increases may be small, but they arrive during a period when Apple is asking customers to absorb more costs across the ecosystem. Device prices, component pressure, cellular financing, AI hardware demands and service subscriptions all affect the total ownership picture.
The AppleCare+ change fits that pattern. Apple is not dramatically changing the service. It is raising the price slightly while keeping the value proposition intact: lower repair costs, battery service, accidental damage coverage and Apple support.
For buyers, the best response is not panic. It is math. Compare the plan price with the device cost, repair risk, usage pattern and whether multiple Apple products would make AppleCare One more efficient. Someone buying a MacBook Pro for travel may want the protection. Someone buying a Mac mini for a desk may not. A family iPad may be a stronger candidate than a carefully handled personal tablet.
AppleCare+ remains a useful safety net. It is just a slightly more expensive one for new Mac and iPad buyers, and that makes the real cost of the device a little higher than the number on the product page.
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