Apple has abandoned its plans to offer iPhones as part of a hardware subscription. The subscription model would have allowed customers to receive a new iPhone every year for a monthly fee without ever becoming the owner of the device.
Background to the planned hardware subscription
Rumors of a planned hardware subscription from Apple have been circulating in the media since spring 2022. We also reported on this. Now the dream of a new sales model seems to have been at least put on hold, if not canceled altogether. This is according to a report by Bloomberg, which cites reliable sources.
In view of the fact that customers are increasingly using their smartphones for longer, Apple was planning a subscription model to increase sales. This would have made it possible to receive a new iPhone every year for a monthly fee without the device becoming the customer’s property. The advantage for customers would have been a regular upgrade, while Apple would have benefited from continuous revenue.
Reasons for abandoning the iPhone subscription plans
The Bloomberg report also reveals the presumed reasons why Apple abandoned its plans. There are probably several of them:
- Changes to Apple Pay: the Apple Pay strategy has been adjusted so that the service no longer offers options to pay for products at a later date or in installments.
- Internal concerns: There were fears that a new subscription program could compete with existing offers such as the iPhone Upgrade Program in the USA or with subsidized smartphones from network operators.
- Technical and regulatory challenges: Difficulties with regulatory approvals and unresolved software issues prevented a timely launch of the model.
Current alternatives for customers
Apple currently offers the iPhone Upgrade Program in the USA, which allows customers to pay for their iPhone in 24 monthly installments and upgrade to a new model after twelve months by setting the term back to 24 months. In future, installment payment options will be processed exclusively via partners such as Klarna.
Conclusion
Apple has discontinued its plans for a hardware subscription model for the iPhone. Customers can continue to use existing financing options while Apple adjusts its sales strategies accordingly.
