Why Apple is selling security as a service

The march to subscription – everything moves on, from streaming services to car features and now even your personal well-being, with Apple’s recent announcements laying the groundwork for a new kind of subscription: Safety as a Service.

The tech company announced September 7 Emergency SOS via Satellite, a new feature available on its latest iPhones that connects users to emergency services via a satellite antenna built into the hardware. Apple said the service would be free for two years, but didn’t say how much it would cost after that period. Apple did not respond to a request for future pricing.

Analysts say the company is leaning on its existing credibility and issues in the health and fitness space, especially following the Apple Watch’s success as a fitness-focused device. The big question Apple is betting on is whether security alone is a sufficient driver to attract customers to a subscription-type service. Consumers may be drawn to the array of services available on iPhone in addition to Emergency SOS.

“We’ve generally seen in our work that consumer upgrades tend to be driven by a collection of features,” Samik Chatterjee, IT Hardware Analyst at JPMorgan. “If you think about what Apple is bringing with its ecosystem, there’s a lot of convenience in using the hardware, but also the services you can have on it, including now security.”

A potential security subscription would sit alongside a host of other wallet-straining offerings from Apple, including Peloton competitor Apple Fitness (which runs for $9.99 a month), its own streaming service Apple TV+, and its curated gaming subscription Apple Arcade both for $4.99 per month. The company also offers a bundled version, the Apple One, for $14.95 per month for its most dedicated subscribers, and even offers hardware-as-a-subscription through the iPhone Upgrade Program, which gives subscribers the latest each year iPhone promises for $39.50 a month.

The story goes on

The concept of security subscriptions is not entirely new. Automaker General Motors has long offered its in-vehicle OnStar service starting at $24.99 per month, which allows subscribers to call emergency services. And navigation-focused rival Garmin has been selling Safety Call subscriptions for its satellite-enabled devices — complete with an easy-trigger SOS button. Garmin’s satellite-based inReach subscription plan currently costs $14.95 per month.

There are significant overhead costs for Apple in providing emergency SOS via satellite. During the tech company’s “Far Out” fall product launch event, Apple unveiled new iPhones equipped with satellite antennas that can contact emergency services without using a cellular network.

The devices will prompt users to send a specially formatted text message via satellite to an Apple-manned center, which will call for help on the user’s behalf. The service will initially be available to users in the US and Canada starting in November, when the first devices with the new antennas come onto the market.

For Apple, whose previous offerings have all been significantly more mainstream, a subscription that focuses on its users’ personal security still relies on user consent.

“The average consumer, even if it’s an outdoorsy person who would go to areas without cellular coverage, is going to take a little time for people to understand,” said Ryan Reith, VP of Consumer Devices at IDC Group.

However, Reith says Apple’s SOS feature could lay the groundwork for wider use of satellites to communicate beyond emergencies — and use security to convince users to pay for the service after the two-year period is over. “I see this as the very first step in what they plan to do to use satellite communications for their device.”

The catch for consumers could be in the testing phase. “Two years free makes perfect sense,” says Reith. “Everyone takes everything for free.”

Mike Juang is a Senior Producer at Yahoo Finance. Follow him on Twitter at @mikejuangnews.

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