Apple is shaking up how Americans get their hands on the latest tech with the launch of a new leasing program called Upgrade. In a strategic partnership with the buy now, pay later giant Klarna, the company will allow customers to lease an iPhone for as little as 17.99 dollars a month over a two year period. This initiative will be available both online and at physical retail locations, requiring only a soft credit check to qualify. While the spotlight is on the iPhone, Apple is extending similar flexible terms to its watches, iPads, and Macs to make its ecosystem more accessible during a period of rising hardware costs.
This move comes at a critical time for Apple as it grapples with a global memory crunch that has already forced price hikes across several product lines. Industry analysts suggest that shifting toward a monthly subscription model allows the company to distract consumers from steep upfront sticker prices. By focusing on affordable monthly payments rather than total costs, Apple hopes to shorten the current device replacement cycle, which has slowed down significantly in recent years. Instead of holding onto phones for four years, users might be more tempted to swap for the newest model every twenty four months.
Under the terms of the agreement, leased devices must be returned at the end of the term unless the user chooses to make a final buyout payment or simply upgrades to another piece of hardware. To keep things attractive, there is no security deposit required and Klarna has pledged not to charge late fees, though they will terminate agreements after three consecutive missed payments. Pricing varies depending on the luxury level of the device; for instance, those eyeing an iPhone 17 Pro can expect to pay between 31.99 and 45.99 dollars per month depending on whether they choose a one or two year commitment.
By replacing its previous iPhone Upgrade Program and moving away from traditional financing via Citizens Bank, Apple is positioning itself to compete more aggressively with major cellular carriers like Verizon and AT&T. These carriers have long dominated the market by locking users into multiyear contracts through subsidized device payments. Now, Apple is attempting to reclaim that relationship by managing the financial side directly through Klarna’s infrastructure. This pivot represents part of a broader effort to create steady recurring revenue streams and reduce dependence on massive annual sales spikes coinciding with new product launches.