Apple’s plan to offer a subscription service for the iPhone is dead before it started. According to Bloomberg, the Cupertino company has put aside a project that would allow people to pay a monthly subscription fee to upgrade the iPhone every year.
Apple started making this plan to change the way people buy phones in 2022. The company’s idea, according to reports from Bloomberg at the time, was to turn phone ownership into a model closer to renting a car. Instead of selling the devices outright or letting people pay them off over many years with monthly payments, consumers will pay a small fee each month to access the device. When a new iPhone drops, subscribers can upgrade to the latest model.
The idea behind the idea was to get more people to pay repeatedly and keep people locked in the Apple ecosystem. For most consumers, the program in practice wouldn’t change much, except that they might pay a monthly fee for the privilege of upgrading their device. Of course, they’ll never own the phone they use—but most people are locked into two- or three-year payment plans, and by the time those payments are over, the device has lost a lot of its value.
These long-standing installment plans, coupled with a distinct lack of attractive features in the latest iPhone releases, have led to a decline in people upgrading the devices. Changing phone ownership to a subscription plan will remove the downside for consumers to upgrade and will keep new devices off store shelves. It will also shift people who pay their mobile carriers for their devices to Apple, which is likely to upset some telecom executives.
But the subscription concept also ignores a potentially key detail of the consumer experience: people want to keep their stuff. A 2023 YouGov survey found that seven in 10 Americans want to hold on to their devices for at least two years, and nearly one in six would keep their phone for five years or more if they could. A Gallup survey found that more than half of respondents said they only upgrade phones when they have to, because their current device has stopped working or is outdated.
Now, that could change if Apple could successfully improve the consumer’s relationship with their device. If it’s no longer a phone they own and a bunch of hardware they’re renting, they may be more willing to give an upgrade a spin if it costs them the same amount every month. But for now, iPhone ownership will continue as it always has: by paying the carrier you hate the monthly fee until the phone is finally yours.
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