Usually not a good sign when a company known for creating innovative real-world products shifts to creating innovative financial products.

Except for Berkshire Hathaway moving from textiles to being Warren Buffet's investment vehicle -- that was a good move...

I wouldn't really call an installment plan a very innovative financial product. And it's not like they'll stop making iPhones and focus on financing. It's just a power move to dominate the phone market and cement their lock on customers.

next is iMortgage

probably not, this is a good dry run for car financing though

That's actually how Porsche ended up in a position where it had to be 'rescued' (=bought) by Volkswagen during the last financial crisis:

http://priceonomics.com/porsche-the-hedge-fund-that-also-mad...

They're not handling the financing. It appears to be going through Citizens Bank, and is an installment loan. [1]

And, if you were hoping to use someone cheap like Cricket instead of Verizon, no such luck there either:

"1. The iPhone Upgrade Program is available to qualified customers only with a valid U.S. personal credit card. Requires a 24-month installment loan with Citizens Bank, N.A. and iPhone activation with a national carrier — AT&T, Sprint, T-Mobile, or Verizon. "

[1] http://www.apple.com/shop/iphone/iphone-upgrade-program

Yeah that was the biggest thing for me too. We knew what was coming with the iPhone, Apple TV and iPad Pro. That upgrade program is going to be a big thing in my opinion.

One thing I wasn't sure about though was do you own the phone or are you just leasing it? When you upgrade after a year do you have to return your old phone?

I can't image them letting you keep the old phone, as you haven't paid full price for it in a year.

EDIT: "Just trade in your current iPhone for a new one, and your new program begins."

Source: http://www.apple.com/shop/iphone/iphone-upgrade-program

If you upgrade after a year, that seems probable. After the full 24 months, I believe that it would be yours. Don't quote me on this, though.

At a $120 premium over a carrier's installment plan.

You gain AppleCare+ as a benefit, bringing the price a lot closer. It's also unlocked, which could be nice for some people.

Here's the big difference, though, at least with AT&T's Next: With Next, the "how often can you upgrade" and "how long do you have to pay" are highly mismatched.

The most frequent upgrade plan is once very 12 months ("AT&T Next 12"). To get this, I have to commit to paying 20 months (or ~3.33 years).

If I want to upgrade two years in a row, I've committed to paying 40 months (2 terms of the plan). That at least gets me 3 upgrades in that term. If I want to go for a 4th upgrade, we're now at an overall committed payment term of 5 years.

That's fine if you're doing this long-term, but Apple's appears much simpler: You pay for 2 years. In that time, you get 2 phones.

Verizon's program lets you upgrade "any time" you want, but only once you've paid off the cost of the new phone. Unless you pay a chunk of change early, this means one upgrade every 2 years, just like a contract, compared to Apple's once-a-year.

What I'm not sure about with Apple's is whether you can end your 2 year plan with a second phone, and then terminate and keep the phone. This is what I'd most like to know before considering this further. The Terms and Conditions page doesn't seem to be up yet..

Given that the upgrade is once every 12 months, timing also seems important. I'd imagine you'd want to activate the plan just after a new iPhone comes out, and hopefully time it so that you end the 2 years right after another new iPhone comes out, if you really want the latest-and-greatest.

Overall though, it seems to be more fair compared to AT&T's Next and Verizon's Early Upgrade programs.

How so? You get AppleCare+, which is $99, and if you compare that with AT&T, it's cheaper per month, unless I'm missing something. It's also unlocked so you can freely switch carriers.

I think there's a lot of people that will be enticed with this.

AppleCare+

I'm sure it will be turned back in, refurbished, and resold in developing markets

Both GE and GM turned themselves into banks. It ended poorly for both of them.