Apple is shaking up how Americans get their hands on the latest gadgets by partnering with buy now, pay later giant Klarna to launch a new leasing initiative. The program, dubbed Apple Upgrade, moves away from traditional ownership models and instead lets customers rent eligible iPhones, iPads, Macs, and Apple Watches over set periods. Depending on the device, users can opt for terms ranging from 12 months for watches and phones up to 36 months for computers and tablets.
Pricing for the service starts relatively low to attract budget conscious consumers, with iPhone leases beginning at 17.99 dollars per month and Apple Watches or iPads starting around 11.99 dollars. To make these monthly costs even more manageable, Apple is allowing customers to trade in their old hardware through its existing trade-in program to lower their payments. Once the lease term ends, users face a choice: they can hand back the device to upgrade to the newest model, keep it by purchasing it outright, or simply return it altogether.
This strategic shift marks the end of several previous financing paths for the company. With the arrival of Apple Upgrade, both the iPhone Upgrade Program and iPhone Payments are being phased out. While those older programs functioned primarily as interest free installment loans often bundled with insurance, this new venture focuses specifically on a leasing structure facilitated by Klarna’s financial infrastructure.
The move reflects a broader trend across the United States where consumers are increasingly turning toward flexible payment plans over lump sum purchases. Recent data suggests that over half of American shoppers have utilized some form of installment plan for online shopping in recent years. By integrating Klarna into its ecosystem, Apple is leaning into this behavioral shift to ensure its high priced premium hardware remains accessible to a wider audience via its website and physical retail stores nationwide.