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<\/a>\nApple has been working on the subscription program for several months, but the project was recently put on the back burner in an effort to launch a \u201cbuy now, pay later\u201d service more quickly. Nonetheless, the subscription service is still expected to launch at the end of 2022, but could be delayed into 2023 or end up getting canceled, the people said.<\/p>\n
Bloomberg reported last year that the company has been working on a \u201cbuy now, pay later\u201d service for all Apple Pay transactions.<\/p>\n
The company has had preliminary discussions internally about attaching the hardware subscription program to its Apple One bundles and AppleCare technical support plans. Apple launched the bundles in 2020 to let users subscribe to several services — including TV+, Arcade, Music, Fitness+ and iCloud storage — for a lower monthly fee.<\/p>\n
The subscriptions would likely be managed through a user\u2019s Apple account on their devices, through the App Store and on the company\u2019s website. It would likely also be an option at checkout on Apple\u2019s online store and at its physical retail locations. Apple accounts are typically tied to a user\u2019s credit or debit card.<\/p>\n
The iPhone maker wouldn\u2019t be the first company to push hardware subscriptions. Peloton Interactive Inc. recently started testing a subscription service that lets consumers lease bikes and fitness content for between $60 and $100 per month. Google also has tried a similar approach with its Chromebook laptops, targeting corporate customers.<\/p>\n
And Apple has offered several installment programs in the past to split up the cost of devices, though not with a subscription model.<\/p>\n
In 2015, the company launched the iPhone Upgrade Program, financed through Citizens One Personal Loans, that let users spread the cost of an iPhone over 24 months and upgrade to a new model every 12 months. It also lets Apple Card users divide the cost of an iPhone or Apple Watch over 24 months or an iPad or Mac over 12 months. Wireless carriers offer several monthly installment programs as well.<\/p>\n
The new approach could make existing services less appealing. A subscription program tied to an Apple account would likely be simpler to manage than a carrier program or even the installment plans for the Apple Card.<\/p>\n
Some on Wall Street have previously urged Apple to switch to a subscription model. Sanford C. Bernstein & Co. analyst Toni Sacconaghi pitched the idea of hardware subscriptions in 2016, saying at the time that it could help Apple get to a $1 trillion market valuation. Apple hit that milestone without embracing the approach – it\u2019s currently worth $2.84 trillion – but Sacconaghi recirculated the report on Thursday.<\/p>\n
Compared with Starbucks coffee or a New York Times subscription, the iPhone is a bargain, he said.<\/p>\n
\u201cMany customers would struggle to think of a single possession they use more than their iPhones,\u201d he said. \u201cMoreover, the cost of the iPhone is a relative bargain versus other services for which consumers willingly pay.\u201d<\/p>\n
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