Apple Reportedly Drops iPhone Subscription Plan

Apple’s plan to offer an iPhone subscription service is dead before it even begins. According to BloombergThe Cupertino company has shelved a project that would have allowed people to pay a monthly subscription fee in exchange for annual iPhone upgrades.

Apple began coming up with the plan to change the way people buy phones in 2022. The company’s theory, according to Bloomberg reports at the time, it was to move phone ownership to a model closer to leasing a car. Instead of selling devices outright or allowing people to pay for them over several years with monthly payments, consumers would pay a flat fee each month for access to the device. When a new iPhone comes out, subscribers can upgrade to the latest model.

The idea behind the now-rejected idea was to get more people involved in recurring payments and keep them locked into the Apple ecosystem. For many consumers, the plan wouldn’t functionally change much, other than they could pay a simple monthly fee for the right to upgrade their device. Of course, they would never own the phone they are using outright, but most people are stuck on two or three year payment plans Either way, by the time those payments are completed, the device has lost much of its value.

These longer-term installment plans, combined with a distinct lack of attractive features in the latest iPhone releases, have resulted in a slowdown in people who update their devices. Turning phone ownership into a subscription plan would eliminate the disadvantage for consumers of upgrading and get new devices off the shelves. It would also move people who currently pay their mobile carriers for their devices to Apple’s level, which would likely anger some telecom executives.

But the subscription concept also ignores a potentially key detail of the consumer experience: People want to keep their stuff. TO YouGov survey 2023 found that seven in 10 Americans want to keep their device for at least two years, and about one in six would keep their phone for five years or more if they could. A Gallup poll found more than half of those surveyed They said they only update phones when absolutely necessary, either because their current device has stopped working or has become obsolete.

Now, that could change if Apple managed to change the consumer’s relationship with its device. If it’s no longer a phone they own and just a piece of hardware they’re renting, they might be more willing to give an upgrade a chance if it’s going to cost them the same price every month anyway. But for now, iPhone ownership will continue as always: By paying a carrier, you pay a monthly fee until the phone finally belongs to you.