Apple has officially launched a new product leasing program called Apple Upgrade, available starting today in the United States. The program, backed by the financial technology company Klarna, allows customers to lease iPhones, Apple Watches, Macs, and iPads with the option to upgrade, purchase, or return the device at the end of the lease term. This marks a significant shift in how Apple finances its hardware, replacing the long-standing iPhone Upgrade Program and iPhone Payments financing options.
The Apple Upgrade program is designed to provide flexibility for consumers who prefer not to pay the full retail price upfront or commit to a traditional installment loan with ownership. Instead, customers pay a monthly fee for the duration of the lease and can choose to upgrade to a newer model once the term ends. The program is integrated directly into Apple's checkout flow on its website and in the Apple Store app, allowing customers to see lease pricing alongside other payment options such as Apple Card Monthly Installments and full payment.
How Apple Upgrade works
Apple Upgrade is available across a wide range of Apple products, including the latest iPhone 17 lineup, MacBook Air, Apple Watch Series 11, and iPad models. The lease terms vary by product category: iPhone and Apple Watch are offered with 12-month or 24-month terms, while Mac and iPad are available with 24-month or 36-month terms. Monthly payments depend on the specific device configuration, with starting prices as follows: iPhone leases start at $17.99 per month for the iPhone 17e, Apple Watch leases start at $11.99 per month for the Apple Watch Series 11, Mac leases start at $24.99 per month for the MacBook Air, and iPad leases start at $15.99 per month for the iPad mini.
To sign up, customers select their desired device and choose Apple Upgrade at checkout. They then undergo a soft credit check through Klarna, which does not affect their credit score. Klarna manages the payments and credit approvals on Apple's behalf, and customers manage their lease details—such as payment due dates and billing information—through the Klarna app. The program does not include AppleCare+ by default, but customers can add it for an extra monthly fee. Existing AppleCare+ plans can also be bundled into an Apple One subscription if desired.
Apple also allows customers to trade in an existing device—including Android phones—during the checkout process to lower the monthly lease payments. This trade-in value is applied to the initial lease term, reducing the amount financed. The first payment is due approximately 30 days after the device is shipped or available for pickup.
Pricing examples for popular devices
Apple has provided specific pricing examples to illustrate how the lease costs compare across products. For instance, the iPhone 17 Pro with 256GB storage, which retails for $1,099, costs $31.99 per month for a 24-month lease or $45.99 per month for a 12-month lease. The Apple Watch Series 11 in GPS configuration with a 42mm case, priced at $399, leases for $11.99 per month over 24 months or $21.99 per month over 12 months. The iPad Pro with 256GB storage, retailing at $1,199, is available for $24.99 per month for 36 months or $31.99 per month for 24 months. The MacBook Pro with 16GB RAM and 1TB storage, priced at $1,999, leases for $38.99 per month over 36 months or $53.99 per month over 24 months. These rates reflect no interest or additional fees, making the total lease cost equal to the retail price if payments are made for the full term.
End-of-lease options and early exit
At the end of the lease term, customers have three choices. They can upgrade to a new device, which starts a new lease agreement. They can purchase the leased device outright by paying the difference between the total payments already made and the original retail price of the product. Or they can simply return the device and exit the program entirely, with no further obligations. These same options are available from day one: customers can upgrade early or exit the program early by paying the remaining balance of the payments they have not yet made. There are no early termination fees or interest charges.
If a customer does nothing at the end of the lease term, the lease automatically converts to a month-to-month arrangement for up to six months, during which monthly payments may increase. After that, if no action is taken, the customer is charged the full purchase price of the device. Importantly, the customer never owns the device unless they pay the purchase price. The program also includes a grace period for missed payments: a missed payment is rolled into the next month's payment without incurring late fees. However, if three consecutive payments are missed, the lease agreement ends and the customer must pay the entire outstanding balance.
Device eligibility and exclusions
Not all Apple products are available through the Apple Upgrade program. Excluded devices include the iPhone 16 and iPhone 16 Plus, the Apple Watch SE, the MacBook Neo, the Mac mini, the iPad (A16), and the Studio Display. Additionally, iPhone leases require activation on one of three major U.S. carriers: AT&T, T-Mobile, or Verizon. Prepaid plans are not accepted, but the iPhone itself is unlocked, allowing customers to switch carriers at any time. The program is not available with Apple's education pricing discount.
Customers who use the Apple Card can earn 3% Daily Cash on their lease payments, adding a small incentive for those who prefer Apple's own credit card. The program is currently available through Apple's website, the Apple Store app, and in physical Apple Stores across the United States.
Historical context and market impact
The Apple Upgrade program replaces the earlier iPhone Upgrade Program, which was introduced in 2015 and allowed customers to pay for an iPhone over 24 months with the option to upgrade after 12 months. That program included AppleCare+ and was financed through a credit check with Citizens Bank. The new leasing program expands beyond iPhones to include Macs, iPads, and Apple Watches, and it leverages Klarna's payment infrastructure. This move aligns with a broader industry trend toward subscription-based hardware models, as companies like Google and Samsung have also experimented with device leasing. Consumers increasingly prefer predictable monthly payments over large upfront costs, and the absence of interest makes leasing an attractive alternative to credit card purchases or carrier installment plans.
Apple's partnership with Klarna brings the fintech company's expertise in short-term financing and consumer credit into the mix. Klarna, known for its “buy now, pay later” services, will handle credit checks and payment processing, potentially simplifying the experience for customers. However, the shift also means that existing iPhone Upgrade Program and iPhone Payments customers must transition to the new system when they are ready to upgrade. Apple has said that current customers can remain on their existing plans until they decide to upgrade, at which point they will switch to one of the new leasing options. This phased transition aims to minimize disruption for loyal users.
The expansion of the leasing program also reflects Apple's strategy to increase ecosystem stickiness. By lowering the barrier to entry for higher-end products like MacBook Pro and iPad Pro, Apple may encourage more customers to adopt multiple devices. Additionally, the ability to trade in Android phones could help attract switchers from competing platforms. The inclusion of Macs in a leasing program is particularly notable, as Apple has traditionally focused on iPhone financing. With Mac sales increasingly reliant on prosumers and businesses, offering a lease option may make premium Macs more accessible to a broader audience.
Apple's decision to exclude certain products, such as the iPhone 16 and the base iPad, likely reflects inventory management and product positioning. The iPhone 16, though older, remains a popular choice for budget-conscious buyers; excluding it encourages customers to choose the newer iPhone 17 models. Similarly, the Apple Watch SE is the entry-level watch, and excluding it may steer customers toward the Series 11, which has higher margins. The MacBook Neo and Mac mini are also excluded, possibly because their lower price points make leasing less attractive or practical.
Overall, the Apple Upgrade program represents a significant evolution in how consumers acquire Apple hardware. With flexible terms, no interest, and easy upgrade paths, it could become the default purchasing method for many Apple enthusiasts. The integration with Klarna also signals Apple's willingness to partner with external fintech firms to enhance its financial services. As the program rolls out, analysts will watch for adoption rates and the impact on Apple's services revenue, particularly if customers bundle AppleCare+ and Apple One subscriptions. For now, Apple Upgrade marks a new chapter in the company's approach to product sales, blending the benefits of ownership with the convenience of leasing.
Source:9to5Mac News