Apple has reportedly canceled its plans to launch an iPhone hardware subscription service that would’ve made it easier to upgrade to the newest model every year, reports Bloomberg‘s Mark Gurman.
The planned service, which has been in development since 2022, would have seen users pay a monthly fee to use an iPhone instead of buying one upfront much like subscribing to software or apps. Users would also get the chance to upgrade to the latest generation by swapping out their older device for the newest one at launch.
The subscription service was seen as a new way to drive up iPhone demand and generate recurring revenue while making it easier for users to upgrade to the latest device without having to pay hundreds or thousands of dollars to pay for one and own it outright. However, it has faced numerous delays since its conception as it was planned to launch in late 2022 before being delayed to 2023 and its ultimate cancelation.
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Technical problems have also forced Apple to cancel the initiative as engineers reportedly faced software bugs. Mounting regulatory concerns regarding Apple’s fintech initiatives have also played a part in the project’s termination which was led by the Apple Pay team. Much like the discontinued Apple Pay Later service, the Cupertino company would have handled loans and financial infrastructure for iPhone subscriptions itself rather than relying on external vendors.
The subscription service would have also upset Apple’s wireless carrier partners that already rely on installment programs and subsidies to sell the iPhone through their channels. Another affected scheme would have been Apple’s own iPhone Upgrade Program, which splits up the ownership cost of an iPhone over two years.
