Apple to discontinue Apple Card financing for iPhones bought without a carrier connection

Apple is making a major change to its Apple Card Monthly Installment purchase option for iPhone buyers. Starting in August, Apple said that it would no longer allow customers to purchase SIM-free iPhone models using Apple Card financing. Instead, a carrier connection with AT&T, T-Mobile, or Verizon will be required.

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Previously, Apple allowed buyers to purchase an iPhone with the “Connect to a carrier later” option. This option means users are free to use the iPhone without a cellular connection or via any carrier of their choice. For instance, you could connect an iPhone purchased with this option to a carrier such as Mint Mobile or Google Fi.

Starting on August 15, however, Apple will require that any iPhone purchased via Apple Card Monthly Installations be connected to AT&T, T-Mobile, or Verizon at the time of setup. This effectively blocks iPhones bought with Apple Card Monthly Installments from being used with other carriers.

The “Connect to a carrier later” option will no longer be available for purchases financed with Apple Card Monthly Installments. This was already the case with iPhones purchased from Apple Stores, but now it applies to online purchases as well. Note that the iPhones will still be unlocked, but the carrier connection will be required at the time of setup.

Apple explains:

Carrier-connected iPhone 14 and iPhone 14 Pro models will arrive ready to activate with eSIM and can connect to your cellular voice and data service without a physical SIM card.

If you completed the steps to authorize activation with AT&T, T-Mobile, or Verizon when you purchased your new iPhone online, it will arrive ready to use. Just turn it on and follow the onscreen instructions to set it up and activate it with the carrier. To activate with eSIM, you will need Wi-Fi for setup.

If you choose “Connect to a carrier later” when you buy your iPhone, you can activate it with your service when you receive your device. If you’re asked to transfer your SIM, follow the onscreen instructions to transfer service from your previous iPhone.

Apple made this announcement via a small footnote on the iPhone buying webpage. In this same message, Apple also says that the terms for Apple Card Monthly Installments for Apple Watch will be reduced from 24 months to 12 months:

Currently, carrier connection with AT&T, T-Mobile, or Verizon is required for all iPhone purchases made with ACMI from Apple Store locations only. Starting August 15, 2023, a carrier connection with AT&T, T-Mobile, or Verizon is required for all iPhone purchases made with ACMI.

Starting August 15, 2023, the ACMI installment terms for new Apple Watch purchases will change from 24 months to 12 months.

The current options when financing with Apple Card. Starting on August 15, the “Connect to any carrier” option will go away.

9to5Mac’s Take

This change to iPhone financing options is intriguing. You can also finance an iPhone purchase from Apple through a loan provided by Citizens Bank. This, however, requires that users apply for the loan, go through a credit check, and potentially impact their credit score even if they already have an Apple Card account.

My guess is that Apple is making this change in part due to pushback from carriers, who may have noticed a decline in customers buying connected iPhones due to the Apple Card Monthly Installments options. Apple, however, hasn’t officially given any reasoning for the change.

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