Apple may not ever sell iPhones on subscriptions

Tuesday that Apple has scrapped its iPhone hardware subscription service that would have charged customers monthly for new devices.

According to sources who spoke to Bloomberg's Mark Gurman, Apple has disbanded the project team and reassigned members to other projects.

The subscription service, in development since 2022, would have allowed Apple account-linked monthly payments for annual iPhone upgrades. Software bugs and regulatory issues delayed the program's launch in late 2022.

After closing Apple Pay Later this year, Apple's financial services ambitions have taken another step back. Gurman reports that Apple now recommends third-party payment programs.

The hardware subscription service would have competed with carrier payment plans and Apple's Citizens Bank NA-powered iPhone Upgrade Program. It could have strained relationships with wireless carriers that use device installment programs to retain customers.

Apple probably considered regulatory pressure. The Consumer Financial Protection Bureau's recent mandate that buy-now-pay-later services follow credit card company regulations may have raised concerns about hardware subscription program oversight.

Apple Pay chief Jennifer Bailey reported to services head Eddy Cue. According to Bloomberg's sources, Apple may revive the subscription concept through financial institution partnerships but has no plans to develop an in-house solution.

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