Apple has reportedly abandoned iPhone-as-a-subscription plans

Apple’s plan to provide an iPhone subscription service is dead before it even got started. according to bloombergThe Cupertino company has shut down a project that would have allowed people to pay a monthly subscription fee in exchange for annual iPhone upgrades.

Apple first started planning to change the way people buy phones in 2022. Principles for the company, according to Reporting from Bloomberg At the time, the idea was to transfer ownership of the phone to a model closer to leasing a car. Instead of selling the devices outright or allowing people to pay for them over the course of several years through monthly payments, consumers would pay a flat fee each month for access to the device. When a new iPhone comes out, customers can upgrade to the latest model.

The idea behind the now-defunct idea was to get more people into recurring payments and keep people locked into the Apple ecosystem. For many consumers, the plan won’t change much functionally, except that they can pay a simple monthly fee for the right to upgrade their device. Of course, they’ll never be full owners of the phone they’re 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 most of its value.

These long-term installment-based repayment plans, coupled with the apparent lack of attractive features in recent iPhone releases. resulting in recession Among people upgrading equipment. Converting phone ownership to a subscription plan would remove the downside for consumers to upgrade and get new devices off store shelves. It would also bring into Apple’s fold those who are currently paying their mobile carriers for their devices, which would probably anger some telecom executives.

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

Now, this may change if Apple successfully maintains the consumer relationship with its devices. If it’s no longer the phone they have and is just a piece of hardware they lease, they may be more inclined to upgrade if it’ll 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 monthly fees until the phone is finally yours.