Apple is reportedly set to launch a new leasing program called Apple Upgrade, which will allow customers to lease the latest iPhones, Macs, iPads, and Apple Watches through a lease-to-own model similar to a car lease. According to a report from Bloomberg's Mark Gurman, the program is expected to go live on July 28th, replacing the existing iPhone Upgrade Program and standard financing options for new devices.
The Apple Upgrade program is designed to offer more flexibility for customers who want to stay current with Apple's product lineup without paying the full upfront cost. Under the program, customers will be able to lease an iPhone or Apple Watch for 24 months, while iPads and Macs will have a 36-month lease term. At the end of the lease, customers can choose to upgrade to a new device, keep the device by completing the ownership process, or return it outright.
Gurman reports that Klarna, the Swedish fintech company known for its buy-now-pay-later services, will serve as Apple's financial backer for the program. A soft credit check will be required to sign up, making it accessible to a wide range of customers. The program is expected to be available on most of Apple's popular devices, including the iPhone 17 series, iPad Pro, MacBook Pro, and Apple Watch Ultra. However, budget-oriented models like the base iPad, iPhone 16, Apple Watch SE, and the fast-selling MacBook Neo will reportedly not be eligible.
One notable change from the current iPhone Upgrade Program is that Apple Upgrade will not include an AppleCare+ subscription, which has also seen a price increase recently. This means customers who want extended warranty coverage will need to purchase it separately. The decision to exclude AppleCare+ may be a cost-saving measure for Apple, as the program is already subsidized through Klarna's financing.
The launch of Apple Upgrade comes at a time when component and RAM shortages are driving prices higher across the electronics industry. Apple itself raised prices on nearly all of its products just a month ago, though the iPhone was notably excluded from that round of increases. With the upcoming iPhone 18 Pro series expected to launch later this year, Apple may be looking to offset potential sticker shock by offering a more accessible leasing option.
The program marks a significant shift in Apple's retail strategy. The original iPhone Upgrade Program, launched in 2015, allowed customers to pay for their iPhone in 24 monthly installments with the option to upgrade to a new model after 12 months. That program also included AppleCare+ and was managed through a partnership with Citizens Bank. By replacing it with a broader leasing program and partnering with Klarna, Apple is signaling a move toward more flexible, consumer-friendly financing that aligns with broader trends in the tech industry.
According to industry analysts, the timing of Apple Upgrade is strategic. With Apple's product cycles becoming more predictable and the cost of high-end devices approaching or exceeding $2,000 for some configurable models, Apple needs to find ways to keep its products within reach of a larger customer base. The lease-to-own model is particularly attractive for customers who prefer to always have the latest technology but are unwilling to pay the full retail price every two or three years.
The eligibility requirements for Apple Upgrade are also worth noting. By excluding budget devices like the iPhone 16 and MacBook Neo, Apple is positioning the program as a premium offering for its flagship products. This could help maintain the perceived exclusivity of devices like the iPhone 17 Pro Max or the MacBook Pro with M4 chip, while still providing a financial pathway for customers who want them.
Experts predict that the Apple Upgrade program could reshape how consumers think about purchasing Apple hardware. By offering a lease option that bundles affordability with upgrade flexibility, Apple may be able to lock in repeat customers who are less likely to switch to competitors like Samsung or Google. This is especially important as the smartphone market matures and upgrade cycles lengthen.
Another factor driving the introduction of Apple Upgrade is the rising cost of AppleCare+. The company recently increased prices for its extended warranty plans, making them a significant additional expense for customers. By removing AppleCare+ from the leasing program, Apple can offer a lower monthly payment while still generating revenue from customers who choose to add the coverage separately. This approach also gives customers more control over their spending, which is appealing in the current economic climate of inflation and high interest rates.
The partnership with Klarna is also noteworthy. Klarna has become a major player in the point-of-sale financing space, offering short-term loans and installment plans that appeal to younger consumers. By aligning with Klarna, Apple is tapping into a demographic that may be more comfortable with alternative financing models. Additionally, Klarna's technology allows for quick credit checks and instant approvals, which could streamline the sign-up process for Apple Upgrade.
However, the program is not without potential drawbacks. Critics point out that leasing programs can sometimes lead to higher overall costs compared to buying outright, especially if customers upgrade frequently or incur fees for early termination or damage. Apple has not yet released full terms and conditions for the program, but industry watchers will be scrutinizing the fine print for hidden costs.
Furthermore, the exclusion of budget devices means that customers looking for affordable Apple products will still need to rely on traditional financing or outright purchases. This could create a two-tier system where premium devices get the most attractive financing options, while budget-conscious buyers are left with fewer choices.
Despite these concerns, the overall reaction to the Apple Upgrade program has been positive among analysts and investors. Many see it as a logical expansion of Apple's services ecosystem, which has become a key growth driver for the company. By offering a leasing program, Apple can generate recurring revenue that is less dependent on individual product sales cycles.
Moreover, the program could help Apple mitigate the impact of supply chain issues and component shortages. By locking customers into multi-year leases, Apple gains more predictable demand for its products, which can help in planning production and inventory management.
From a consumer perspective, the Apple Upgrade program offers several potential benefits. Customers who want to always have the latest technology can do so without the hassle of selling their old devices. The program's flexibility—choosing to upgrade, keep, or return at lease end—provides options that traditional financing does not. Additionally, the soft credit check means that even those with less-than-perfect credit may be able to qualify.
As the July 28th launch date approaches, more details about Apple Upgrade are likely to emerge. Customers interested in the program should watch for updates from Apple Retail and the online store. Meanwhile, the program underscores Apple's commitment to making its products more accessible while maintaining a premium brand image.
Source:The Verge News