• Apple (AAPL) launches Apple Upgrade leasing program in the U.S. through Klarna, phasing out older financing options.
  • iPhones start at $17.99/month with 12–24 month leases; Mac and iPad leases span 24–36 months.
  • The shift aims to boost upgrade cycles and soften price resistance amid rising device costs.

Apple Upgrade Goes Live

Apple is set to roll out its new device-leasing program, called Apple Upgrade, in the U.S. on July 28, 2026, according to people familiar with the matter. The initiative, backed by buy-now-pay-later fintech Klarna, will offer monthly leases starting at $17.99 for iPhones and $11.99 for Apple Watches, with terms ranging from 12 to 24 months for mobile devices and 24 to 36 months for Macs and iPads.

The program marks a significant shift in how the tech giant finances hardware purchases. Apple will discontinue its iPhone Upgrade Program and iPhone Payments, both of which provided installment loans rather than leases. Existing customers on those plans can transition to the new leasing model or complete their current terms.

“We wanted to give customers more flexibility and lower upfront costs,” an Apple spokesperson said, though they declined to comment further on the specifics of the transition. Attempts to reach Klarna for comment were not immediately returned.

The move comes as Apple faces mounting competition in premium smartphones and seeks to lock in users with lower monthly payments. Unlike the old iPhone Upgrade Program, which offered interest-free loans with a trade-in after 12 payments, the new leasing model operates like a rental: customers can upgrade at any time or return the device at the end of the lease. Ownership is not an option unless the customer buys out the residual value.

Fintech Partnership Deepens Ecosystem Ties

Klarna’s involvement signals a deeper integration of alternative lending into mainstream tech retail. The Swedish fintech will handle credit checks and payment processing, while Apple retains control over device distribution and trade-ins. The partnership could face regulatory headwinds as U.S. lawmakers increasingly scrutinize deferred-interest and lease-to-own products.

Analysts say the program could accelerate upgrade cycles, particularly for iPhone, which generates roughly half of Apple’s revenue. “By lowering the monthly barrier, Apple essentially turns a $1,000 phone into a $20-a-month subscription—making it easier for consumers to say yes,” said a tech analyst who spoke on condition of anonymity.

However, the long-term economics remain uncertain. Leases require Apple to bear residual-value risk, and any uptick in defaults or early returns could pressure margins. Some current iPhone Upgrade Program members expressed confusion on social media about the terms. “I thought I owned my phone after 24 months—now it’s just a rental?” one user wrote on Reddit.

Apple has not disclosed future plans for international expansion, but similar programs in Europe or Asia could follow if the U.S. rollout proves successful.

Correction: A previous version of this article stated Apple Upgrade launches on July 28, 2025. The correct date is July 28, 2026.