Apple Hangs Up Plan For An iPhone Hardware Subscription Service

Apple is abandoning a hardware subscription service that it had been working on, according to Bloomberg’s Mark Gurman. The idea was spawned as the company was looking for ways to tempt customers into owning more of its flagship iPhone models. However, the company encountered numerous stumbling blocks, one of which was upsetting the wireless carriers it partners with.

The plan was to make the subscription a seamless part of a customer’s Apple account, similar to when a user subscribes to a service or an app. Customers would pay a monthly fee, which would include being able to receive the latest iPhone on a yearly basis. The company was hoping that this would be a new source of reliable recurring revenue that would satisfy investors.


The regulatory environment played a role in the demise of this hardware subscription program as well. Apple was concerned that rules put in place by the Consumer Financial Protection Bureau would mean that the company had to follow the same limitations as credit card companies. This is because the program was similar in nature to Apple Pay Later, which the company cancelled after deciding those rules were too onerous.

Additionally, it would have ended up competing against wireless carriers who are an important partner in getting iPhones into people’s hands. It’s a method of distribution that customers have become accustomed to, and it wouldn’t have made sense to upset the apple cart when it’s working so well. Doing so would risk having wireless carriers pushing their customers to Android devices instead.

However, it would not be surprising to see this program brought back in the future. The potential for tariffs to significantly increase the cost of iPhones is real, so having another way for customers to jump into the Apple ecosystem without feeling sticker shock is probably a good idea.