Why Apple Is Likely to Launch an iPhone Subscription Program


Subscriptions are an important part of Apple’s business model. In 2022, Apple’s services, which include Apple Music, Apple TV+, iCloud+, etc., reported gross earnings of $78 billion. That’s a lot of money.

To put it in perspective, that’s a little less than three times the GDP of the state of Vermont. It seems that subscriptions are working out very well for Apple economically, so the rumors about the company launching an iPhone hardware subscription make a lot of sense.

Apple May Be Working on an iPhone Hardware Subscription

Close up of an iPhone Lock Screen showing the time

According to a Bloomberg post by Mark Gurman, Apple has been working on an iPhone subscription for some time. Initially, the idea was to launch it alongside the iPhone 14 and iPhone 14 Pro, but for various reasons, it didn’t happen.

Gurman says Apple is still working on it and intends to launch it sooner rather than later. If true, it would make sense to do it just in time for the launch of the next iPhone in 2023, but we have no official information yet.

Why an iPhone Hardware Subscription Is the Next Logical Step

Apple Store logo

The iPhone is becoming increasingly more expensive to manufacture. Costs and labor are going up, and Apple will have to pass that on to the customer at some point. In fact, there are already rumors of an even more expensive iPhone 16 Ultra that Apple could launch in 2024. Moreover, considering a recession is on the cards, it seems reasonable to think that iPhone sales will drop.

Apple needs to find a solution to this problem, and this could be it. After all, expecting consumers to pay over $1,000 a year to upgrade their iPhones is not the same as asking them to pay $80 a month. The business model would be sound, and here’s why:

The user ideally pays less than if they finance the device because they could return it when they decide to stop paying. Apple could rent that device to another user, get a higher return than if it simply sold it, and more people could enjoy the latest iPhone models.

Apple’s other big problem is that users are upgrading their iPhones less. Except for some technology enthusiasts (including ourselves), no one upgrades their iPhones annually. But this business model would solve that problem.

How an iPhone Hardware Subscription Benefits Users

Image of Add Funds to Apple ID page on an iPhone-1
Image Credit: Apple

The best thing about subscriptions is that you can cancel them when you don’t need them and re-subscribe whenever you want. An iPhone subscription would have its advantages over financing one.

For starters, financing forces you to pay every month, whether you use the iPhone or not. Also, it could affect your credit score, and sometimes the interest rates are pretty high.

With a subscription, you would pay no interest, your credit history would be intact, you could pause it whenever you wanted, and you would ideally pay less. You could also switch iPhones more frequently, and it might include AppleCare+ warranty coverage, so you don’t have to worry about anything.

iPhone Subscriptions Could Benefit Apple and Customers

In recent years, consumers have been using their iPhones longer than they used to. They average three to five years, and that’s not good for Apple. In the past, the changes from iPhone to iPhone were almost exponential, and many users found the upgrade worth it.

However, the changes have been incremental in recent years, and many don’t see the point in upgrading iPhones yearly. This supposed iPhone subscription program could solve one of Apple’s biggest problems and benefit its users at the same time, but we’ll have to wait and see how this rumor turns out.


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