Apple’s rumored iPhone subscription service shelved after delays

Apple’s ambitious plan to launch an iPhone hardware subscription service, which was first rumored in 2022, has officially been shelved. The concept was straightforward yet transformative: a recurring monthly fee would grant users access to Apple’s flagship devices, potentially including annual upgrades. However, multiple delays stemming from technical, regulatory, and operational challenges have led to the cancellation of this much-anticipated initiative.

Initially, Apple envisioned the hardware subscription service as a seamless extension of its ecosystem, akin to how App Store subscriptions function. Reports suggested that the program would be financed internally by Apple rather than relying on third-party lenders. In theory, this would have allowed Apple to strengthen its direct connection with customers, locking them into its ecosystem while ensuring a steady revenue stream. Despite the promising premise, software bugs and regulatory hurdles reportedly derailed the project. By late 2022, hopes for a public launch began to wane, and recent updates confirm that the company has officially ceased its efforts.

Instead of pursuing this bold initiative, Apple has redirected resources to other priorities and continues to promote existing payment options. The iPhone Upgrade Program, for example, offers a similar experience to what the subscription service might have provided. Through this program, users can pay a monthly fee to own the latest iPhone and AppleCare+ coverage, with the option to upgrade to a new model after 12 payments. This plan, underwritten by Citizens Bank, enables Apple to offer device financing without shouldering all the financial risks internally.

For those seeking flexibility, Apple Card Monthly Installments provide another viable option. Customers can spread the cost of Apple devices over a series of payments, including the purchase of iPhones, iPads, and Macs. Additionally, major carriers continue to offer their own financing plans, giving consumers a variety of alternatives.

While the idea of an all-encompassing hardware subscription may have been a strategic move to ensure user retention and recurring revenue, it also presented significant risks. Apple’s decision to prioritize its suite of digital subscription services, such as Apple Music, iCloud, and the Apple One bundles, reflects its focus on areas that have already proven successful in generating consistent revenue.

(via Bloomberg)