Apple iPhones working on a hardware subscription service

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Bloomberg reported last year that the company was working on a “buy now, pay later” service for all Apple Pay transactions.

The company has had preliminary discussions internally about possibly tying the hardware subscription program into its Apple One bundles and AppleCare support plans. Apple launched the plans in 2020 to allow users to subscribe to multiple services, including TV+, Arcade, Music, Fitness+ and iCloud storage, for a lower monthly fee.

Subscriptions would likely be managed through a user’s Apple account on their devices, through the App Store, and on the company’s website. It would likely also be an option at checkout on Apple’s online store and at its physical outlets. Apple accounts are usually linked to a user’s credit or debit card.

The iPhone maker wouldn’t be the first company to offer hardware subscriptions. Peloton Interactive Inc. recently began testing a subscription service that allows consumers to rent bikes and fitness content for between $60 and $100 per month. Google has also tried a similar approach with its Chromebook laptops, targeting businesses.

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And Apple has offered several installment programs in the past to spread the cost of devices, but not with a subscription model.

In 2015, the company launched the iPhone Upgrade Program, funded by Citizens One Personal Loans, which allows users to spread the cost of an iPhone over 24 months and upgrade to a new model every 12 month. It also allows Apple Card users to split the cost of an iPhone or Apple Watch over 24 months or an iPad or Mac over 12 months. Wireless carriers also offer several monthly payment programs.

The new approach could make existing services less attractive. A subscription program linked to an Apple account would probably be easier to manage than a carrier program or even the installment plans for the Apple Card.

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—Bloomberg News

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