Apple has opened its device business to a leasing model for the first time, launching Apple Upgrade in the US in partnership with Klarna. The scheme covers iPhone, Apple Watch, Mac and iPad, and is available through the Apple Store online, the Apple Store app and Apple’s physical retail locations.
The launch follows a round of price rises in June, when Apple lifted the cost of several iPad and Mac configurations by $200 or more, blaming the soaring cost of memory and storage chips. Those components have become dramatically more expensive as artificial intelligence firms hoover up supply, with Counterpoint Research reckoning prices have quadrupled inside a year.
Against that backdrop, a monthly figure of $17.99 does a good deal of work. It moves the conversation away from a rising sticker price and towards something that feels manageable.
What the scheme is not, however, is a discount. Leasing is a different way of paying. Here is what it involves.
What exactly is Apple Upgrade?
It is a leasing plan, closer in spirit to a car lease than to a loan. Klarna, the buy now, pay later firm, provides the leases; Apple provides the shop floor. Customers pay monthly for an agreed term, then decide whether to buy the device, swap it for a newer one or hand it back.
How long are the terms, and what do they cost?
iPhone and Apple Watch leases run for 12 or 24 months. Mac and iPad leases run for 24 or 36 months. Entry pricing begins at $17.99 a month for iPhone, $11.99 for Apple Watch, $24.99 for Mac and $11.99 for iPad, though those are floor figures attached to the cheapest eligible configurations.
Costs climb with the hardware. An unlocked iPhone 17 Pro works out at $31.99 a month across two years, or $45.99 a month across one. A $1,999 MacBook Pro comes in at $38.99 a month over 36 months.
Which devices are eligible?
Not the entire catalogue. Certain models sit outside the scheme. Eligibility and pricing also vary by storage tier.
How does it work?
Klarna handles it, in store or online, and the decision arrives within minutes. Applicants undergo a soft credit check, which does not affect their credit score. No security deposit is required. The first payment falls due 30 days after the device ships or is collected, and everything thereafter — billing schedule, outstanding payments, lease documentation — lives in the Klarna app.
Can the monthly figure be reduced?
Yes, in two ways. Trading in an existing device at the point of enrolment lowers the monthly payment, and Apple Trade In accepts rival handsets including Google Pixel and OnePlus models. Separately, paying the monthly bill with an Apple Card earns 3 per cent Daily Cash.
What happens when the term ends?
Three options: buy the device with a single closing payment, return it and start a fresh lease on a newer model, or return it and walk away owing nothing further. Customers who do none of the above are rolled onto a month-to-month arrangement for up to six months.
What does the buyout actually cost?
This is where the numbers deserve attention. Macworld ran the figures on a 14-inch MacBook Pro priced at $2,649. Over 24 months the lease costs $74.34 a month, totalling $1,784.16, or roughly two-thirds of the retail price, leaving $864.84 to pay at the end. Over 36 months it costs $52.87 a month, totalling $1,903.32, with $745.68 outstanding. Structured that way, buying at the end amounts to an interest-free instalment plan.
Does leasing ever cost less than buying outright?
Only if the device goes back. Wirecutter’s calculation on a base iPhone 17e, which retails at $600, puts the 24-month lease at around $432 in total, roughly $168 short of the purchase price — but the customer owns nothing at the end. The total paid never exceeds the retail price, whichever term is chosen.
What about interest and late payments?
There is no interest, which distinguishes the arrangement from Klarna’s standard longer-term plans. A missed payment is rolled into the following month’s bill. Three consecutive misses terminate the lease automatically, at which point the remaining balance falls due, potentially reduced if the device is returned. Accounts that stop paying altogether are eventually passed to debt collection, and credit scores suffer at that stage. Klarna also offers a one-month deferral, capped at twice per lease, and an early termination route for customers in difficulty.
Can a lease be exited early, or upgraded mid-term?
Both, at a price. Leaving early requires returning the device and paying an early termination fee equal to the remaining payments. Upgrading mid-lease, should a new model appear, follows the same logic: the old device goes back, the outstanding payments are settled as an upgrade fee, and a new agreement begins — often at a higher monthly rate.
Is AppleCare included?
No. The old iPhone Upgrade Programme bundled AppleCare in; Apple Upgrade makes it an optional add-on. That partly explains the lower headline monthly figures, and it also means loss, theft or damage during the term is the customer’s problem unless cover is bought separately.
Why is Apple doing this now?
Beyond softening the impact of component costs, leasing addresses a structural problem: the average iPhone is now kept for close to four years, by Bernstein’s estimate, and a leasing cycle nudges customers back into the shop sooner. Investors have long argued that recurring monthly payments would smooth out Apple’s dependence on blockbuster product years.
The pressure is unlikely to ease. Morgan Stanley has suggested Apple may need to add roughly $200 to the iPhone 18 Pro to protect margins, while TechInsights puts the potential increase in bill-of-materials cost at as much as $300. A foldable iPhone, widely expected in September and rumoured to land near $2,500, would test consumer appetite further. Apple’s leadership will change in the same window, with John Ternus due to succeed Tim Cook as chief executive on September 1.
Karen Rasmussen, Apple’s vice-president of the Apple Store online, described the scheme as offering customers “a more flexible way to pay for the products they love”.
So is it worth it?
That depends entirely on the customer’s habits. For those who upgrade on a fixed rhythm and have no wish to sell old hardware, a lease removes the hassle and the large upfront payment. For those who keep devices for years and eventually resell them, buying almost certainly works out better.
