 "Apple abandons plans for hardware-as-a-subscription model for iPhones")
Apple has reportedly shelved its ambitious plan to offer iPhones through a subscription service, an idea that would have shifted the way consumers purchase their devices. The plan, originally conceived in 2022, aimed to create a model akin to car leasing, where users would pay a monthly fee for the right to upgrade to the latest iPhone each year.
The subscription model was intended to simplify the buying process and tie more users into Apple’s ecosystem. Instead of paying outright or through instalment plans, customers would essentially rent their devices, swapping them for new models when released. While this could have made upgrades more accessible, it would also mean users never fully owned their phones.
Why the plan stalled
The decision to abandon the subscription concept reflects a mix of market challenges and consumer behaviour. Many users already pay for phones via instalments through their mobile carriers in the US, effectively spreading costs over two or three years. By the time they finish payments, the device often holds little value, leading many to delay upgrading.
Surveys have also highlighted a key consumer preference: ownership. A 2023 YouGov study revealed that 70 per cent of Americans prefer to keep their phones for at least two years, with some holding onto their devices for five years or more. Another poll by Gallup found that over half of respondents only upgrade when necessary—either due to functionality issues or obsolescence. This attachment to ownership and the reluctance to upgrade frequently may have made Apple’s subscription model less appealing.
Impact on Apple’s strategy
The subscription service was envisioned as a way to address slowing device upgrades, partly driven by longer repayment plans and the lack of significant new features in recent iPhone models. By removing ownership, Apple hoped to encourage regular upgrades and shift users paying their carriers directly into Apple’s ecosystem—a move that might have strained relations with telecom companies.
However, the plan’s cancellation suggests Apple is betting on traditional payment models for now. The company may revisit the idea in the future, particularly as competition intensifies and consumer habits evolve. For now, iPhone ownership remains the same: consumers continue paying off their devices through their carriers until they can finally call them their own.
What’s next for Apple
As Apple focuses on refining its hardware and services, the company’s ability to drive innovation and make upgrades irresistible will likely play a bigger role in boosting sales. While the subscription model could have been a game-changer, the decision to scrap it highlights the delicate balance between innovating payment methods and meeting consumer expectations.
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