Apple is delaying plans to offer iPhones as a monthly subscription. . It was first reported that the company was exploring the possibility of a hardware subscription. but like the company's buy now, pay later product, it seems that this ultimately proved too problematic.
Hardware subscriptions have been rumored to work similarly to existing options such as or Apple Card Monthly Installment, where you pay for a new phone or other Apple device in monthly installments and, in some cases, get the option to upgrade to a new device without changing your subscription fee. Unlike these payment methods, where your payments are applied to a one-time credit from Citizen One or Goldman Sachs, the Apple subscription had to be managed through an Apple account and use any payment methods you've already signed up for.
Apple expected that if it directly absorbed the cost of the iPhone, people would upgrade more often and increase the company's recurring revenue. The problem is that, like Apple Pay Later, which lets you split Apple Pay purchases into four small payments, a hardware subscription could require Apple to “follow the same rules as credit card companies.” Bloomberg speaks. This is additional scrutiny that the company did not want to involve.
There's also the potential strain that hardware subscriptions could create in Apple's relationships with carriers. You can buy iPhone 16 from T-Mobile or Verizon with an installment plan that may technically be different from a subscription, but definitely feels like one when you pay monthly.
Apple's hardware subscription has never been officially announced, but it reflects what could be a broader retreat from financial services headaches. Apple Pay was later and replaced by access to credit verification in Apple Pay as part of iOS 18. Apple Card is also reportedly in limbo as Apple seeks a partner. .