Apple will offer installment payments for iPhones
Apple launches a major device leasing program (Photo: Unsplash)
Apple is changing the way it sells its devices. Starting July 28, the company will launch Apple Upgrade in the United States—a new leasing-based program developed in partnership with Klarna, according to a Bloomberg report by Mark Gurman.
How the leasing program works
Apple Upgrade will function similarly to car leasing or a subscription service.
Customers will receive a device in exchange for a monthly payment and will have several options:
- buy the device outright before the lease ends,
- upgrade to a newer model before the agreement expires,
- keep the device after completing the lease,
- return the device to Apple.
Some transactions may include additional fees.
To join the program, customers will need to complete a simplified credit check.
The lease terms will depend on the type of device:
- 24 months for iPhone and Apple Watch
- 36 months for Mac computers and iPad tablets
A shift in financing
Apple Upgrade comes as the company raises prices on Macs, iPads, and other devices due to the global memory chip shortage, as well as the expected price increase for new iPhone models this fall.
Apple will position leasing as a way to reduce customers' monthly costs compared with its current financing options.
With the launch of Apple Upgrade, the company will stop accepting new applications for the existing iPhone Upgrade Program and its standard financing plans.
New limitations
One of the biggest differences is that AppleCare extended warranty will not be included.
The program will also exclude entry-level and budget models, including:
- Apple Watch SE
- the base iPad
- iPhone 16
- MacBook Neo
Business and education purchases will not be eligible for Apple Upgrade either.
Apple had previously developed its own in-house hardware subscription service but canceled the project in 2024. By partnering with Klarna, the company can now introduce a leasing model without taking on the financial risks itself.
