Analysts at Deutsche Bank reviewed Apple Inc. (NASDAQ:AAPL) following the news reports that the company was looking into offering a hardware subscription service for its devices.

With details scarce, multiple assumptions need to go into any financial analysis, but based on many different scenarios, the analysts believe that a hardware subscription would be financially accretive to the company (although likely only modestly in the short-term).

More important than the short-term EPS accretion opportunity in the analysts’ view, however, is the opportunity to reset consumer expectations of how often to refresh an iPhone and to get more consumers to try other Apple subscription services (which it can do through a hardware/services bundle).

Additionally, while the analysts already consider the company's iPhone revenue as highly recurring (there is a very low percentage of iPhone users who switch from an iPhone to an Android device), if the hardware subscription service gains meaningful traction, the analysts believe valuation can re-rate higher as investors give a higher valuation for the more traditional recurring revenue business model.