A new Apple project appears to have been trashed. Since 2022, the brand has sought to launch a financing program allowing its customers to pay a monthly subscription and therefore change their iPhone every year. A project that is visibly too complex and leaves it to third-party companies specializing in this process.
Too complex to set up
Apple had an ambitious plan: transform the way consumers access its flagship products by creating a “hardware subscription service”. The idea was to make owning an iPhone an experience similar to subscribing to an app, but the much-delayed project was ultimately canceled.
An ambitious vision for the iPhone
The concept of a hardware subscription service was simple, but revolutionary. Instead of paying for an iPhone outright or committing to a traditional installment plan, customers would have paid a monthly subscription. This amount would have been debited via their Apple account, usually used for applications and services. In exchange, users would have been able to replace their iPhone with the latest model every year, a dream for some customers.
The objective of this program was twofold:
- Provide an even more integrated user experience.
- Guarantee Apple a source of recurring income, in line with its services such as Apple Music or iCloud.
A development strewn with pitfalls
Initially planned for the end of 2022, the project has experienced several postponements. Among the main reasons:
- Software issues: Apple has had difficulty integrating this service into its already complex ecosystem.
- Regulatory concerns: The nature of this subscription, akin to an internal loan, has raised legal questions in several regions.
Despite these challenges, Apple launched internal testing of the service earlier this year for its Apple Pay group employees. The teams responsible for billing for the App Store and the online store were also mobilized for this ambitious project.
Abandonment in a context of financial reshuffles
The decision to cancel this service comes in a context where Apple has also ended its Apple Pay Later program. Launched as a financing option allowing any purchase made with Apple Pay to be divided into four payments without fees or interest, this service did not meet with the expected success. Today, Apple has chosen to rely on third-party partners like Klarna to offer financing solutions via Apple Pay.
Not to mention the legal issues with Goldman Sachs over the Apple Card. A fine of 89 million dollars which surely discouraged Apple from embarking on a new system involving regular transfers of money between it and its customers subscribing to this new service.
A strategic shift for Apple
The closure of the hardware subscription project marks a turning point in Apple’s strategy. As the company continues to diversify its revenue with services like Apple Music, iCloud or Apple Fitness+, it seems less inclined to internalize complex financial models. The abandonment of this program suggests that Apple now prefers to collaborate with financial partners for its financing solutions, rather than manage them internally.
