Apple Inc. is working on a subscription service for the iPhone and other hardware products, a move that could make device ownership similar to paying a monthly app fee, according to people with knowledge of the matter.
The service would be Apple’s biggest push yet into automatically recurring sales, allowing users to subscribe to hardware for the first time—rather than just digital services. But the project is still in development, said the people, who asked not to identified because the initiative hasn’t been announced.
Apple shares climbed to a session high after Bloomberg reported on the news, gaining as much as 1.6% to $172.87. The stock had been down 4.1% this year through Wednesday’s close.
Adopting hardware subscriptions, akin to an auto-leasing program, would be a major strategy shift for a company that has generally sold devices at full cost outright, sometimes through installments or with carrier subsidies. It could help Apple generate more revenue and make it easier for consumers to stomach spending thousands of dollars on new devices.
Already, the iPhone is Apple’s biggest source of sales, generating nearly $192 billion last year—more than half the company’s revenue.