By Apple has reportedly shelved its plans to create an iPhone hardware subscription program, which would have enabled customers to pay monthly installments for new devices, Bloomberg revealed on Tuesday.
According to sources cited by Bloomberg’s Mark Gurman, the iPhone-maker has dissolved the team dedicated to the project and redirected its members to other ventures.
Apple Halts iPhone Subscription Service Amid Financial Services Setbacks
- Apple’s hardware subscription service, under development since 2022, aimed to allow users to upgrade to a new iPhone annually through monthly payments linked to their Apple accounts, similar to app-based subscriptions.
- Initially planned for a late 2022 launch, the program faced repeated delays due to software issues and regulatory challenges.
- This decision highlights a broader retreat from Apple’s financial service ambitions, following the discontinuation of the Apple Pay Later program earlier this year.
- According to Bloomberg’s Mark Gurman, Apple is now steering customers toward third-party payment options as an alternative.
Apple Scraps Hardware Subscription Service Amid Carrier and Regulatory Challenges
- The hardware subscription model was designed to rival existing iPhone purchase options, such as carrier installment plans and Apple’s iPhone Upgrade Program, managed through Citizens Bank NA.
- Launching such a service might have risked straining Apple’s relationships with wireless carriers, which depend on installment plans to retain customers.
- Regulatory concerns played a significant role, with the Consumer Financial Protection Bureau’s recent mandate requiring buy-now-pay-later services to adhere to credit card regulations, potentially signaling similar scrutiny for Apple’s subscription initiative.
- The project, led by Apple Pay chief Jennifer Bailey under the supervision of services head Eddy Cue, has been shelved. While Apple might explore partnerships with financial institutions to revisit the concept, there are currently no plans for an in-house implementation, according to Bloomberg sources.
