Apple may not ever sell iPhones on subscriptions

Apple has abandoned its plans to develop an iPhone hardware subscription service that would have allowed customers to pay monthly fees for new devices, Bloomberg reported Tuesday.
The iPhone-maker has disbanded the team working on the project and reassigned members to other initiatives, according to people familiar with the matter who spoke to Bloomberg's Mark Gurman.
The subscription service, which had been in development since 2022, would have enabled customers to receive annual iPhone upgrades through monthly payments linked to their Apple accounts, similar to app subscriptions. The program was originally scheduled to launch in late 2022 but faced multiple delays due to software bugs and regulatory concerns.
This move marks another retreat from Apple's financial services ambitions, following the company's earlier decision to shut down its Apple Pay Later program this year. According to Gurman's report, Apple is now directing consumers toward third-party payment programs instead.
The hardware subscription service would have competed with existing iPhone purchase options, including carrier payment plans and Apple's own iPhone Upgrade Program, which operates through Citizens Bank NA. It could have potentially strained relationships with wireless carriers who rely on device installment programs to retain customers.
Regulatory scrutiny likely influenced Apple's decision. The Consumer Financial Protection Bureau's recent mandate requiring buy-now-pay-later services to follow credit card company regulations may have raised concerns about similar oversight for the hardware subscription program.
The project was overseen by Apple Pay chief Jennifer Bailey, who reports to services head Eddy Cue. While Apple could potentially revive the subscription concept through partnerships with financial institutions, the company currently has no plans to pursue an in-house solution, according to Bloomberg's sources.