Apple has launched a new leasing program that allows customers to pay for iPhones, Macs, iPads, and Apple Watches in monthly installments, a move that analysts say is designed to combat rising device prices and encourage more frequent upgrades.
The program, called “Apple Upgrade,” replaces the company’s previous iPhone Upgrade Program and expands leasing options to a wider range of products. Apple is partnering with payment platform Klarna to offer the service in the United States starting Tuesday.
“Apple Upgrade lands at precisely the moment Apple needs it,” said Francisco Jeronimo, an analyst for market research firm International Data Corporation (IDC). “Apple’s real risk is that rising prices even further can impact the upgrade cycle.”
Under Apple Upgrade, customers can lease iPhones and Apple Watches for 12 or 24 months, while Macs and iPads can be leased for 24 or 36 months. The program includes select products, including the iPhone 17 lineup, the new iPhone Air, Apple Watch Series 11 and Ultra 3, various Mac models (excluding MacBook Neo), and iPad Pro, Air, and Mini (excluding the base iPad).
The cheapest iPhone leasing option starts at $17.99 per month, significantly lower than the previous iPhone Upgrade Program which started at about $42 per month. However, AppleCare+ is not included in the lease payment and must be purchased separately, potentially increasing the total cost for customers who want full coverage.
The leasing program comes as consumers are holding onto their devices longer than ever before. According to a survey last year from Reviews.org, the average user keeps their phone for 22 months.
Jeronimo said the program could help consumers think about an iPhone or Mac as a subscription rather than a big-ticket purchase. This shift could prove crucial as some analysts expect Apple’s next batch of iPhones to cost even more due to ongoing memory chip shortages driven by increasing demand from data centers.
“We should start thinking about a $1,500 iPhone instead of a $1,000 (or) $1,200 iPhone,” said Mike Howard, vice president of memory coverage at research firm TechInsights.
The launch comes ahead of Apple’s anticipated iPhone launch in September, where the company is expected to release what could be its most expensive smartphone yet: the first foldable iPhone, according to Bloomberg.
Customers can apply for Apple Upgrade in-store or online, where Klarna performs a soft credit check that does not affect credit scores. Payment is made through the Klarna app, where users can track their billing schedule and remaining payments.
Unlike carrier financing, the phone is unlocked, allowing customers to switch carriers at any time. At the end of the lease term, users have three options: purchase the device outright, return it and end the program, or trade it in for a newer model.
Customers who want to upgrade mid-lease can swap their device for a newer model, but they must return the previous device, enter a new lease agreement, and pay a termination fee equal to the remaining payments on the current lease.
The new program replaces the iPhone Upgrade Program, which allowed consumers to swap out iPhones after making 12 monthly payments. Existing participants can finish their current terms and then choose to enroll in the new program, use Apple Card Monthly Installments, finance through a carrier, or purchase a device outright.
Apple Upgrade is now available across Apple retail stores, online, and via the Apple Store app in the United States.
