Apple has been working on an iPhone hardware subscription program for a while now. As the company plans to have a bigger role in consumers’ financial lives, Bloomberg‘s Mark Gurman, in his Power On newsletter, says that Apple is facing “engineering and technical seatbacks to launch this offering.”
According to him, launching this program has proven more difficult than expected. Currently, Apple is working on four financial offerings: Apple Pay Later, a saving accounts, an iPhone hardware subscription, and Apple Pay Monthly.
Although Apple Pay Later is now beta testing by the company’s retailers, all the other services are nowhere near launch. When Gurman first reported on the iPhone hardware subscription program, he said Apple’s goal was to release it by the end of 2022 for the iPhone 14 announcement.
As for the iPhone subscription service, the goal for that program was to debut it in 2022 or 2023. It remained in development alongside the release of the iPhone 14 last year — which would have been an ideal time to launch it — but the service never appeared. It should still arrive eventually. Anything that makes it easier for consumers to buy ever-costlier iPhones probably makes sense for Apple in the long run.
With the iPhone hardware subscription program, Apple wants to make the process of buying a device similar to paying for iCloud storage or Apple Music every month. Customers will reportedly be able to use the same Apple ID and App Store account they use to buy apps and subscribe to services.
In many ways, this sounds like an upgrade to the iPhone Upgrade Program. Introduced in 2015, the iPhone Upgrade Program allows customers to pay for an iPhone and AppleCare+ monthly over the course of 24 months. After making 12 payments, program members can upgrade to a new iPhone and start a new plan if they want.
The biggest difference would be that the monthly charge wouldn’t be the cost of the device split over 12 or 24 months. Instead, Apple will come up with a new monthly fee. Depending on the customer’s chosen device, the fee will be higher or lower.
Apple has also discussed allowing hardware subscribers to upgrade to newer models when they come out. Apple typically introduces a new iPhone, Apple Watch, and at least one iPad every year. This might simplify the upgrading process as well.
BGR will keep reporting on Apple’s efforts to bring new financial services to its users.