In recent years, the biggest lulls in Apple's (NASDAQ:AAPL) stock growth have been the result of waning sales of the company's flagship iPhone. As smartphone penetration rates grow and technical innovation slows, people are simply holding onto their old iPhones longer rather than upgrading with each new release.

Those problems came to a head this year, as the aforementioned issues combined with economic weakness in China sent year-over-year revenue from iPhone falling, declining 15%, 17%, 12%, and 9% in the four fiscal quarters of 2019.

However, the company's recent focus on a trade-in program may well be a precursor to a long-rumored development that could completely change how investors view Apple -- a subscription iPhone.

iPhones in several colors arranged in a fan and being splashed to illustrate water resistance.

Image source: Apple.

It's not so far-fetched

An exchange between an analyst and CEO Tim Cook on Apple's Q4 conference call suggests that just such an offering could be in the works.

Bernstein Research analyst Toni Sacconaghi noted that Apple's offer of a year of free Apple TV+ with the purchase of an iPhone was the first time investors had seen a "significant" bundling of services and hardware -- leading to this inevitable question: "Do you ever believe that your hardware itself might be offered as a bundled service?" Hardware as a bundled service is just another way of saying subscription iPhone.

Cook's response to the question shows just how close we may be to an iPhone subscription:

There are customers today that essentially view the hardware like that because they are on upgrade plans and so forth. And so to some degree that exists today. My perspective is that we will grow in the future to larger numbers that will grow disproportionately.

He went on to signal that Apple might be preparing to step up its efforts toward that fateful day (emphasis in quote is mine): "One of the things we are doing is trying to make it simpler and simpler for people to get on these sorts of monthly financing kind of things. ... There are lots of users out there that want sort of a recurring payment like that ... and we are committed to make that easier to do than perhaps it is today."

Apple is taking baby steps

As it so often does, Apple already has programs in place that could be a sign that a subscription iPhone is inevitable.

In 2015, Apple launched the iPhone Upgrade program, which let users pay off the device by making up to 24 monthly installment payments and allowing them to upgrade to the latest iPhone after the first 12 payments. An additional benefit to this program was the inclusion of the AppleCare+ protection plan -- something of a bundle itself. More recently, the company introduced a perk for holders of the Apple Card, permitting them to purchase a new iPhone on the card interest-free and pay for it over 24 months -- while also getting 3% cash back.

In September, Apple provided details for the company's new trade-in program, which allows users to turn in a recent model and get a discount on the newer iPhone, making monthly payments on the remaining balance. Apple fans have flocked to the new program. On the conference call, CFO Luca Maestri said, "We also continue to see great results from our trade-in program with more than five times the iPhone trade-in volume we had a year ago."

To Cook's point, these programs are already laying the groundwork for a subscription iPhone. Apple just needs to take the final plunge and make the announcement.

Is Apple swimming against the tide?

Smartphone sales have been declining for some time, as year-over-year shipments worldwide have fallen for seven consecutive quarters. This trend has come after years of growth. Given that users are holding their iPhones longer, a subscription plan -- perhaps one bundled with some of Apple's latest services offerings -- would likely entice customers to join a never-ending upgrade cycle.

At the same time, investors love nothing more than recurring revenue -- and the predictable income it provides. The potential for a subscription iPhone service, combined with the tech giant's recent focus on its services segment, could be just the strategy Apple needs to propel the company to the next phase of its growth.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.