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Apple Abandons Plans to Offer iPhones via Subscription Model
In a surprising move, Apple has allegedly decided to scrap its plans to offer the iPhone as a monthly subscription service. According to Bloomberg, the tech giant was exploring this option as early as 2022 but ultimately deemed it too problematic.
The proposed hardware subscription would have allowed customers to pay for an iPhone through a series of monthly installments, similar to existing payment methods like the iPhone Upgrade Program or Apple Card Monthly Installments. However, unlike these options, which rely on external financial institutions, Apple’s subscription model would have been managed directly through an Apple account using already-connected payment methods.
By fronting the cost for an iPhone, Apple aimed to encourage customers to upgrade more frequently and increase recurring revenue. Unfortunately, this approach might have required the company to comply with regulations akin to those governing credit card companies – a prospect that apparently proved too daunting.
Moreover, introducing a hardware subscription could have put additional strain on Apple’s relationships with carriers, which already offer installment plans for iPhones through partnerships with T-Mobile or Verizon. The lack of an official announcement suggests that this plan was never far enough along to be publicly revealed.
This decision reflects a larger retreat by Apple from the complexities and challenges associated with financial services. In June 2024, the company shuttered its Apple Pay Later service, replacing it with access to Affirm loans within Apple Pay as part of iOS 18. Similarly, the Apple Card is reportedly in limbo while the tech giant searches for a new partner to replace Goldman Sachs.
The implications of this move are still unclear, but one thing is certain: iPhone enthusiasts can continue to purchase their devices through traditional means without the added complexity of a subscription model.
Source: www.engadget.com
