Apple is preparing to launch “Apple Upgrade,” a new device leasing program that will allow customers to pay for select iPhone, iPad, Mac, and Apple Watch models over time, according to Bloomberg, which cited people familiar with the plans.
The program is expected to launch in the US on July 28 and will be available through Apple’s retail stores and online store. Apple is partnering with Klarna as the financial backer behind the service, Bloomberg reported.
Unlike traditional purchases, Apple Upgrade will work more like a subscription. Customers will reportedly have the option to pay off their device early, upgrade to a newer model before the lease ends, keep the device after the payment period, or return it at the end of the lease.
iPhone and Apple Watch leases are expected to run for 24 months, while Mac and iPad plans will run for 36 months.
The timing of Apple’s move comes as the company faces higher hardware costs linked to a global memory shortage driven partly by demand from AI data centers.
Apple has already increased prices on some Mac and iPad products, and analysts expect the company’s upcoming iPhone lineup to become more expensive when new models arrive in September. Reuters reported that Apple is positioning the new program as a way for customers to access lower monthly payments compared with existing financing options.
By spreading payments over longer periods, Apple could make premium devices feel more affordable at a time when consumers are becoming more sensitive to hardware prices.
Klarna partnership reduces Apple’s financial burden
The partnership with Klarna gives Apple a way to expand device financing without taking on the lending responsibility itself.
Apple had reportedly explored creating its own hardware subscription service before abandoning the idea in 2024. By working with Klarna instead, the company can offer a leasing model while relying on an established financial partner. Klarna, known for its buy-now-pay-later services, saw its shares rise after reports of the partnership emerged, Bloomberg reported.
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What customers should know
Apple Upgrade will not be a complete replacement for every Apple purchase option. Some lower-cost products, including the Apple Watch SE, entry-level iPad, iPhone 16, and MacBook Neo, will reportedly not qualify.
The program will also exclude business and education purchases. Another major difference from Apple’s current iPhone Upgrade Program is the lack of AppleCare coverage. Bloomberg reported that Apple plans to stop accepting new sign-ups for its existing iPhone Upgrade Program and standard financing options once Apple Upgrade launches.
A bigger shift in how Apple sells hardware
The move signals a broader change in Apple’s approach to device ownership. For years, Apple’s strategy relied heavily on customers buying expensive hardware outright and upgrading every few years. A leasing model could encourage more frequent upgrades while lowering the upfront cost barrier.
However, the program also introduces new tradeoffs. Customers may pay over a longer period, face possible fees for certain transactions, and lose some protections that came with previous programs, such as included AppleCare coverage.
If Apple Upgrade gains traction, it could push more of the company’s hardware business toward recurring payments, a model that has become common across technology and automotive industries.
The challenge will be convincing customers that a long-term lease offers better value than buying and keeping their devices.
Also read: Apple reportedly canceled M2 and M3 Extreme chips for the Mac Pro before shifting more attention to the Mac Studio.