As Apple readies the launch its Apple Pay Later service, the company is also continuing to work on an iPhone hardware subscription service. Bloomberg reports today, however, that just like Apple Pay Later, this iPhone subscription service is also suffering from engineering delays.
iPhone hardware subscription service still coming
In the latest edition of his Power On newsletter, Bloomberg’s Mark Gurman explains that Apple has four fintech projects in the works right now. Two of those, Apple Card Savings Account and Apple Pay Later, have publicly been announced. The other two haven’t been announced, “Apple Pay Monthly Installments” and an iPhone hardware subscription program.
Gurman says that the iPhone subscription program was set to launch alongside the iPhone 13 in 2021 or the iPhone 14 in 2022. Like Apple’s other fintech projects, however, it’s suffered from “engineering and technical setbacks that have led to slow progress and missed deadlines.” Still, the project remains in the works inside Apple and has not been scrapped.
The iPhone hardware subscription program will differ from other financing options for iPhone buyers because “the monthly charge wouldn’t be the price of the device split across 12 or 24 months.” Instead, it would be a “yet-to-be-determined monthly fee that depends on which device the user chooses.”
Bloomberg explains that Apple’s fintech services are based on an underlying platform, created by Apple, that’s “one of the most ambitious parts of Apple’s finance efforts.” Referred to as “Project Breakout,” this platform is what Apple will use to move more of its fintech projects completely in house: “checks, approvals and transaction histories.” All of these things are currently overseen on behalf of Apple by partners.
Both of those services remain underway at Apple, but it’s clear that the financial push has proven more difficult than expected. I believe the delays to all four initiatives stem from engineering challenges, as well as work on a next-generation financial system that will support them.
Apple Pay Later is expected to launch sometime by “March or April,” according to Gurman. There’s no word on an updated timeline for things like Apple Card Savings Account or the yet-to-be-announced iPhone subscription or Apple Pay Monthly services.