Apple Discontinues iPhone Subscription Service Amidst Record Revenue Growth

Plans for an iPhone subscription service wherein consumers might pay a monthly charge for their smartphones and get yearly updates have been shelved by Apple Inc. (AAPL, Financials). Originally run under Jennifer Bailey by the Apple Pay team, the initiative encountered internal problems and delays before being shelved, according to sources referenced by Bloomberg.

Meanwhile, Apple announced a new September quarter income record of $94.9 billion, a 6% rise over the same time previous year, hence this development coincides with that. The company’s profits per diluted share came at $0.97; while, the adjusted earnings per diluted share came at $1.64, representing a 12% year-over-year rise when deducting a one-time income tax charge of $10.2 billion linked with a European Union court judgment.

By using Apple’s financial ecosystem to provide direct loans to consumers, the suggested subscription model sought to connect Apple’s products and services. Supported by Goldman Sachs (GS, Financials), this strategy would have been different from current initiatives such the Apple Card payment plans and the iPhone Upgrade Program funded by Citizens Bank NA.

Amid this, Apple’s iPhone sales have shown fortitude even with the subscription service’s termination. Driven by great demand for the iPhone 15 and previous versions, iPhone revenue in the most recent quarter came at $46.2 billion, a 5.5% rise year over year. The late-quarter release of the iPhone 16 is projected to increase sales over the next Christmas season even more.

With income of $24.97 billion, up over 12% from the year before, Apple’s services business also reached a new all-time high. This increase emphasizes how well the business has expanded from hardware into digital services, therefore influencing its whole financial performance.

This article first appeared on GuruFocus.