Samsung Electronics Co. Ltd. (OTC:SSNLF) is set to introduce a subscription model for its Galaxy smartphones. This move comes after Apple Inc. (NASDAQ:AAPL) paused its own subscription service plans last month.
What Happened:The subscription service, known as the AI Subscription Club, was initially launched in December for select Samsung home appliances in South Korea. Samsung's vice chair, Han Jong-hee, confirmed the expansion to Galaxy phones and the Ballie AI robot. The service will be available in Korea and the U.S., with Ballie being introduced first in these regions, The Verge and ETNews reported on Wednesday.
Samsung's subscription model allows consumers to pay a monthly fee for AI-powered devices, offering optional repair and maintenance services. This approach aims to reduce upfront costs for users. The company plans to unveil more details during the Galaxy Unpacked event in San Jose, California, on Jan. 22.
Meanwhile, Apple was developing a similar subscription service for iPhones, intending to offer new phones annually for a monthly fee. However, Bloomberg reported that the project was halted last month due to regulatory concerns and internal challenges.
Why It Matters: The concept of hardware subscriptions has been gaining traction as a potential revenue booster for tech companies. According to a 2022 report, Apple was exploring this model to increase its revenue streams, as only the most dedicated Apple fans tend to upgrade their iPhones annually. Most users typically upgrade every three years, a frequency that has decreased over the past decade.
Samsung's upcoming Galaxy Unpacked event, scheduled for Jan. 22, 2025, in San Jose, will likely provide further insights into their subscription plans. The event will showcase the new Galaxy S25 series and advancements in Galaxy AI, potentially setting the stage for Samsung's expanded subscription service.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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