Apple is preparing to launch a new lease-to-own device subscription program in the United States in partnership with Klarna, marking a significant shift in how the company sells its hardware. The new service, reportedly called Apple Upgrade, will allow customers to lease eligible Apple devices with the flexibility to upgrade to newer models, purchase the device outright before the lease ends, or return it at the conclusion of the term. The initiative is expected to debut on July 28, initially in the U.S., as Apple looks to stimulate hardware sales amid rising device prices.
Unlike Apple’s existing financing options, the new program will cover a broader range of products—including iPhones, Macs, iPads, and Apple Watches—and will be financially backed by Klarna. Apple is also reportedly planning to discontinue new enrollments in its current iPhone financing programs to make way for the new subscription-based offering.
Apple Upgrade Introduces a Flexible Lease-to-Own Model
The new program is designed to function similarly to an automobile lease, giving customers multiple options throughout the financing period.
Users will be able to:
- Make monthly payments for eligible Apple devices.
- Upgrade to a newer model before the lease expires.
- Purchase the device outright by paying the remaining balance.
- Return the device when the lease term ends.
Apple is expected to market the program as offering lower monthly payments than its existing financing plans, making premium devices more affordable for consumers.
Apple Upgrade at a Glance
| Feature | Details |
|---|---|
| Program name | Apple Upgrade (reported) |
| Financial partner | Klarna |
| Launch market | United States |
| Expected launch | July 28 |
| Purchase option | Lease, upgrade, buy, or return device |
Most Apple Devices Will Be Eligible
According to reports, the subscription program will support most of Apple’s flagship hardware lineup.
Eligible Product Categories
| Product | Expected Lease Term |
|---|---|
| iPhone | 24 months |
| Apple Watch | 24 months |
| iPad | 36 months |
| Mac | 36 months |
However, several entry-level products—including the iPhone 16, Apple Watch SE, entry-level iPad, and MacBook Neo—are reportedly excluded from the initial rollout. Business and education purchases are also not expected to qualify.
Klarna Powers the Financing
Rather than financing the program itself, Apple has partnered with Klarna, one of the world’s largest buy now, pay later (BNPL) providers.
Customers enrolling in Apple Upgrade are expected to undergo a soft credit check, and Klarna will provide the underlying financing for the lease agreements. This partnership reflects Apple’s broader strategy of relying on established financial partners after discontinuing its own Apple Pay Later service in favor of third-party lending integrations.
Apple to Retire Existing Financing Programs
The new subscription model is expected to replace Apple’s existing consumer financing options for new customers.
Reports indicate Apple plans to phase out:
- The iPhone Upgrade Program.
- Standard Apple financing for new enrollments.
Unlike the current iPhone Upgrade Program, AppleCare+ will not be bundled with the new Apple Upgrade subscription, meaning customers who want extended warranty coverage will need to purchase it separately.
Comparison of Financing Options
| Feature | Existing Program | Apple Upgrade (Reported) |
|---|---|---|
| Device coverage | Primarily iPhone | iPhone, Mac, iPad, Apple Watch |
| Upgrade option | Yes | Yes |
| AppleCare included | Yes | No |
| Financial partner | Apple/Citizens and others | Klarna |
Why Apple Is Introducing the Program
The reported launch comes as Apple faces increasing pressure to sustain hardware sales while navigating higher component costs.
Recent increases in memory and storage chip prices—driven in part by surging demand for AI infrastructure—have pushed Apple to raise prices on several product categories, excluding the iPhone. By lowering upfront costs through a lease-to-own model, Apple aims to make premium devices more accessible and encourage more frequent upgrades.
The initiative also reflects a broader shift in consumer electronics toward subscription-style ownership, where customers prioritize predictable monthly payments and regular access to the latest devices over outright ownership.
Looking Ahead
Apple’s reported partnership with Klarna represents one of the company’s most significant changes to its hardware financing strategy in years. By introducing the Apple Upgrade lease-to-own program, Apple is expanding beyond traditional installment plans and offering consumers greater flexibility to lease, upgrade, purchase, or return their devices. If the program launches as expected, it could make Apple’s premium ecosystem more accessible while encouraging faster hardware replacement cycles.
The success of the initiative will likely depend on customer adoption, pricing competitiveness, and the appeal of lower monthly payments. Should the U.S. rollout prove successful, Apple could eventually consider expanding similar subscription-based hardware financing models to additional international markets, further reshaping how consumers purchase its products.
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