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Apple reported nearly $20.8 billion in revenue from its services offerings in its latest quarterly financial report, and once again, sent home the message that its non-hardware products can handle the market and supply chain headwinds better than bread-and-butter products like iPhones and Macs. Therefore, it doesn’t come as a surprise that over the past few quarters, the company has doubled down on its services push, introducing lucrative services like Apple Pay Later while cooking up more. In the latter class is reportedly a hardware subscription service that would let buyers essentially rent an iPhone in the same way they pay monthly on a service like Netflix.
The rumored service was first reported by Bloomberg back in March 2022, but it appears that it has run into technical snags and isn’t on the horizon for a launch in the immediate future. In the latest edition of his PowerOn newsletter, Bloomberg reporter Mark Gurman pins the alleged delay in the hardware subscription service’s release on “engineering challenges.” The service will reportedly hawk the hardware alongside other complimentary services like the Apple One bundle and Apple Care.
Apple’s do-it-all approach may be behind the delay
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Discussing the “engineering and technical setbacks that have led to slow progress and missed deadlines,” Gurman claims that the product is still underway, but its fate is tied to the other ambitious fintech products that Apple is developing. Among those unannounced financial services is reportedly Apple Pay Monthly Installments, which would allow Apple to collect interest by offering a stretched iteration of its Pay Later service. Said to be in development under the umbrella initiative called Project Breakout, Apple’s deeper push into the financial side of things reportedly includes the development of a system that handles everything from credit checks to approving loans and doling out credit rewards.
At the moment, all these responsibilities are handled by Apple’s banking partners, but the company reportedly seeks to do it all in-house. And that’s taking more time than what Apple had originally anticipated. Assuming the leaks prove accurate, the hardware subscription service will be available at varying rates depending on the device customers pick. Industry watchers are of the opinion that a hardware subscription service will push more enthusiasts into trying Apple’s expensive products at a nominal cost, opening doors for earning new customers. It also makes sense from a business perspective, as Apple could use it as a showcase for both new and previous-generation iPhones at varying prices while milking money by running refurbished units through the hardware subscription cycle.
