Apple is no longer pursuing a hardware subscription service for its iPhones, according to a report from Bloomberg. Initially envisioned in 2022, the service aimed to let users upgrade to a new iPhone annually for a fixed monthly fee. However, challenges related to software development, regulatory concerns, and operational complexity have reportedly led to the project’s discontinuation.
Unlike existing programs like the iPhone Upgrade Program or Apple Card Monthly Installments, which involve loans managed through third-party financial institutions like Citizens One or Goldman Sachs, Apple’s proposed subscription model would have been internally managed through users’ Apple accounts. This approach was expected to drive frequent upgrades and create a steady stream of recurring revenue for the company.
However, the concept came with significant complications. Regulatory concerns were a key factor. Reports suggest the service might have required Apple to comply with financial regulations similar to those governing credit card companies. This level of oversight was something Apple was unwilling to take on.
The company also had to consider how the service might impact relationships with carriers like Verizon and T-Mobile. Many carriers already offer installment plans for iPhones, which are functionally similar to subscriptions. Introducing a competing program could have complicated these partnerships.
Apple’s struggles with the hardware subscription service are part of a larger trend of setbacks in its financial services. Apple Pay Later, a feature allowing users to split payments into four installments, was discontinued in June 2024 and replaced by Affirm loans integrated into Apple Pay in iOS 18. Meanwhile, Apple’s collaboration with Goldman Sachs for the Apple Card remains uncertain as the company looks for a new partner.
While the subscription service has been shelved, consumers can still access several installment options. The iPhone Upgrade Program allows payments over 24 months, with the option to upgrade after 12 months. Apple Card Monthly Installments provide another route for spreading out payments for iPhones and other products. These services remain available for users seeking flexible payment plans without the need for a subscription.
