Apple is reportedly negotiating with Goldman Sachs for the latter to provide financing to its customers. In addition to iPhone financing, the talks are said to be for financing for other Apple products, including iPads and Apple Watches. Although neither of the firms have confirmed the talks, it seems logical that the iPhone maker is looking for a way to take some of the bite out of shelling out $1,000 for an iPhone.
Goldman Sachs may provide iPhone financing
Citing sources familiar with Apple’s plans, The Wall Street Journal reports that the company wants Goldman Sachs to provide loans to customers who buy its products so that they don’t have to put them on credit cards bearing high interest rates. Goldman has served as Apple’s investment bank for some of its own transactions and fundraising.
According to the WSJ, the negotiations between the two firms are still ongoing and may not result in any deal. Neither of the two firms are commenting on the newspaper’s report.
Goldman targets retail banking, lending industries
Goldman Sachs started to pursue the retail banking business in recent years. The firm launched Marcus, its online lender which provides refinancing of credit card debt, in 2016. Goldman has been trying to grow both its retail banking arm and its lending segment to offset the weak performances in its legacy businesses, including trading.
The firm is also reportedly working on a program that would likely be used to provide the iPhone financing to Apple customers. According to the Journal’s sources, Goldman’s program will provide loans and financing to shoppers at the point of sale, enabling them to make purchases using financing at checkouts in participating retailers without putting items on credit cards.
Analysts concerned about iPhone X sales
Analysts have been concerned even since before the ultra-pricey iPhone X launched because of questions about whether consumers would be able or willing to shell out so much cash for a new phone. However, even top competitor Samsung has been raising the prices of its flagship smartphones over the last year, and now we’ve been hearing that the Galaxy S9’s price will likely increase significantly.
Some argue that consumers are willing to pay more for smartphones because they’re keeping them longer, and companies are looking for ways to handle the elongating replacement cycles. If Apple does team up with Goldman for iPhone financing, it could go a long way toward convincing more consumers to fork over the cash.
Apple stock ticked lower in early trades, falling by less than 1% to as low as $161.11 out of the gate on Wednesday.