Apple Reportedly Abandons Plans To Offer iPhone as a Subscription

Apple appears to have scrapped its plan to offer the iPhone as part of a “hardware subscription service,” which could have allowed customers to upgrade to a new iPhone every year.

Bloomberg has reported that the service, which could have allowed customers to pay for an iPhone as they do for an app, was initially expected to debut at the end of 2022. However, regulatory concerns and the lack of a proper framework for the software required for the subscription caused a delay. Previous reports have suggested the project was delayed until 2023 and even beyond.

According to the report, Apple was testing the iPhone subscription service internally among its employees who also worked for the now-discontinued Apple Pay Later service. The iPhone maker also involved teams, working on App Store billing and the online store.

What was the iPhone subscription project?

Apple has been long-rumoured to be working on some kind of subscription service under which customers can swap their iPhones with the latest model every year. As such, buyers would pay a yearly or monthly fee to own the iPhone instead of paying the full amount upfront. It would have been similar to how users subscribe to an app or an in-app service, such as Apple Music. According to the report, the hardware subscription service would leverage the company’s financial infrastructure and even involve offering loans to customers.

Why has Apple discontinued the project?

While the report does not offer a reason behind Apple’s fresh move, the company likely had to deal with several challenges, including regulatory concerns, in implementing the project. Moreover, the discontinuation of the Apple Pay Later service may also have prompted Apple to abandon the project since the subscription service was essentially going to be its extension.

What are the existing options?

Apple’s iPhone Upgrade Program is still available in select countries, allowing customers to trade in their old or used device when buying a newer model. It also offers the ability to split the purchase into instalments for up to two years.