Apple shelves subscription plan that would have made iPhone upgrades simpler

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Apple has stopped working on an iPhone subscription service, which would have made buying iPhones a lot easier, as per a report by Mark Gurman for Bloomberg. The report states that the idea behind the subscription plan was simple but ambitious. It would have given the option to buyers to subscribe to the iPhone like they do for all apps, instead of buying an iPhone outright or paying in installments.

A monthly fee would let them own an iPhone and even upgrade to a new model each year. However, the project was quietly shelved after facing setbacks like software bugs, regulatory concerns, and internal challenges.

What was the iPhone subscription service all about?

If launched, this service would have been a potential game-changer for customers. It could have made owning the latest iPhone simpler, with no upfront costs or complicated carrier installment plans. For Apple, it meant more consistent revenue and deeper customer loyalty, as people stayed tied to their ecosystem of devices and services. But not everyone was thrilled about the idea, as per the report. Wireless carriers, who rely on their own installment programs to sell iPhones, would likely have been unhappy with the competition.

One major hurdle was tighter financial regulations. Earlier, Apple also dropped its "Pay Later" service, which let customers split purchases into multiple payments. Regulators wanted such services to follow the same strict rules as credit cards, creating a lot of red tape. Since the iPhone subscription used a similar system, Apple decided it wasn’t worth the risk.

By shutting down the project, Apple is signaling a cautious approach to entering the financial space. They’ve opted to work with partners like Affirm and Klarna for “buy now, pay later” services instead of building their own. While the idea of an iPhone subscription isn’t off the table forever, for now, Apple seems more focused on maintaining its core offerings without diving too deep into financial regulations.