Report: Apple Drops Plans for iPhone Hardware Subscription Service

Highlights

• Apple has scrapped the plans for hardware subscription service.
• The idea was to allow users to upgrade iPhones through a monthly subscription model.
• Apple also ended its Apple Pay Later program and has shifted to offering third-party financing options.

How many of you remember Apple’s plan to make iPhone purchase a subscription-like? Well, it’s good in case you don’t remember since it appears Apple has scrapped its plans. We are talking about the “hardware subscription service” that would have made upgrading to a new iPhone as easy as subscribing to an app.

According to a recent Bloomberg report, the project was “recently wound down” after facing multiple delays. It was initially set to launch in late 2022 and later the service was pushed back to 2023 due to software challenges and regulatory issues.

The report explains, “It would work like this: Instead of paying for an iPhone outright or signing up for an installment plan, customers would have a monthly fee billed to the same Apple account they use for downloading apps and subscribing to services. They’d then be able to swap out their iPhone for a new model each year.”

“Like the now-defunct Apple Pay Later program, the hardware subscription would use an in-house financial infrastructure and be based on loans provided by the company itself. Early this year, Apple deployed the iPhone subscription service as a test for employees within its Pay group. Teams working on App Store billing and the online store were also involved,” it also added.

However, the company has since decided to shelve the initiative.

This decision comes the same year Apple ended its Apple Pay Later program, which allowed customers to finance purchases made with Apple Pay in four equal payments over six weeks, interest-free.

Apple has now shifted to offering third-party financing options such as Affirm and Klarna supported in iOS 18.

The company continues to provide the iPhone Upgrade Program for those looking for flexible payment options. This program supported by Citizens Bank splits iPhone payments into two-year installments and allows upgrades after one year.

Moreover, customers can also opt for Apple Card Monthly Installments to finance their purchases.

FAQs

Q1. What happened to Apple’s hardware subscription service?

Answer. Apple has scrapped its plans for the hardware subscription service, which aimed to allow users to upgrade to a new iPhone as easily as subscribing to an app, due to multiple delays and challenges.

Q2. What financing options is Apple offering now?

Answer. Apple has shifted to offering third-party financing options such as Affirm and Klarna, supported in iOS 18, after ending its Apple Pay Later program.

Q3. What is the iPhone Upgrade Program and how does it work?

Answer. The iPhone Upgrade Program, supported by Citizens Bank, splits iPhone payments into two-year instalments and allows upgrades after one year. Customers can also opt for Apple Card Monthly Installments to finance their purchases.

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