Apple Reportedly Abandons Plan for iPhone-as-a-Subscription

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

Apple first started concocting the scheme to change the way people buy phones back in 2022. The theory for the company, according to reporting from Bloomberg at the time, was to shift phone ownership into a model closer to leasing a car. Instead of selling devices outright or allowing people to pay them off over the course of multiple years through monthly payments, consumers would pay a flat fee every month for access to the device. When a new iPhone drops, subscribers could upgrade to the latest model.

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

These longer-term installment-based repayment plans, paired with a distinct lack of enticing features in recent iPhone releases, have resulted in a slowdown in people upgrading devices. Turning phone ownership into a subscription plan would remove the downside for consumers to upgrade and would get new devices off store shelves. It’d also move people who are currently paying their mobile carriers for their devices over into Apple’s ledge, which would probably piss off some telecom execs.

But the subscription concept also ignores a possible key detail of the consumer experience: people want to keep their stuff. A YouGov survey from 2023 found that seven in 10 Americans want to hang onto their device for at least two years, and about one in six would keep their phone for five or more years if they could. A Gallup survey found more than half of respondents said they only upgrade phones when they absolutely have to, either because their current device has stopped working or has become obsolete.

Now, that might change if Apple were to successfully upend the consumer relationship with their device. If it is no longer a phone they own and just a hunk of hardware they lease, they might be more willing to give an upgrade a spin if it is going to cost them the same price every month anyway. But for now, iPhone ownership will continue as it always has: by paying a carrier you hate a monthly fee until the phone finally belongs to you.