Apple Shelves Development Of iPhone Subscription Service

Apple Inc. has reportedly put the brakes on creating an iPhone hardware subscription service, reversing from an earlier plan that would have made the ownership of an iPhone similar to subscribing to an app for users.

The plan was to have users pay monthly fees and receive new phones annually. According to Bloomberg’s Mark Gurman, who cited sources familiar with the development, the project has been scratched and the team working on it moved to another project. 

The iPhone maker had planned to launch the subscription programme in 2022, which was postponed until 2023, and has now abandoned it completely. Software glitches and worries about possible regulatory scrutiny were encountered during the programme’s development, according to the report.

Apple intended to create the hardware subscription service to increase revenue and make its flagship iPhones and other expensive new devices more accessible to potential consumers. The service would have meant more regular users in the Apple’s device ecosystem and a recurring flow of revenue.

The company’s Apple Pay group was reportedly developing the hardware subscription programme. The group had earlier this year discontinued Pay Later—its buy now, pay later product—due to more stringent regulations.

Because the iPhone subscription service would have been similar to Pay Later in terms of technology and framework, Apple may have been worried that it would also come under regulatory scrutiny. The challenges of introducing such a service in a tighter regulatory environment may also have been greater as compared to its expected advantages.