According to reports, Apple has developed a mechanism that would make purchasing iPhones comparable to subscribing to apps. It appears that Apple has put the project on hold, even though it was supposed to launch two years ago. The business has reportedly canceled its plans for a “iPhone hardware subscription service” and fired all of the employees involved with the ambitious project, according to Bloomberg. According to reports, the idea was adapted from the app subscription model, which included an annual upgrade clause. It appears that Apple ended the service to evade the financial restrictions and market scrutiny associated with buy-now, pay-later, and similar offers, such as these substitutes for the now-defunct Apple Pay Later program.
It appears that problems with the underlying software were another factor contributing to the project’s delays and final cancellation. Another reported barrier to the company’s success was carrier networks, which allegedly sell a considerable amount of iPhones with cellular plans included. “The service would have competed with — and likely upset — Apple’s wireless carrier partners, which increasingly rely on installment programs and promotions to sell iPhones and retain customers,” according to the report.
If it becomes a reality, the service might have a significant impact on iPhone sales, which are Apple’s top source of revenue. Notably, according to sources, Apple intended to develop an iPhone subscription system entirely internally rather than working with financial institutions. However, even from a logistical standpoint, building an end-to-end infrastructure that includes elements like insurance is not a simple undertaking.
A difficult financial path to follow
Apple had already started testing its iPhone subscription service among its Payments, App Store billing, and online store teams, according to the story, which cites anonymous internal sources. The fact that Apple would have complete control over the entire chain was the most noteworthy feature of the cancelled service. According to reports, the business intended to implement a “in-house financial infrastructure” and establish a lending system whereby Apple would reimburse the value of leased iPhones. It might have eventually taken the place of the two installment-based iPhone purchase plans that are currently available, both of which rely on banks to handle the financial aspects.