Cupertino partners with Klarna to replace its long-running iPhone Upgrade Program with a broader, lower-cost leasing model across its entire product lineup.
July 28, 2026 — Apple today officially launched Apple Upgrade, a sweeping new device leasing program that marks one of the most significant changes to how customers acquire Apple products in nearly a decade. The program, backed by financial services firm Klarna, replaces the company's longstanding iPhone Upgrade Program and expands leasing options across the entire Apple ecosystem — covering iPhone, Apple Watch, Mac, and iPad.
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| Apple Launches "Apple Upgrade" — A New Leasing Program for iPhone, Mac, iPad, and Watch |
The move signals a strategic shift for Apple: rather than offering interest-free financing that results in ownership, the company is now treating its hardware more like a recurring service — one where customers pay for access, with the option to upgrade, return, or eventually buy out their device at the end of the term.
A New Model: Lease, Don't Finance
Under the previous iPhone Upgrade Program, Apple essentially offered a 24-month, 0% APR loan through Citizens Bank. Customers made payments, and the phone was theirs once paid off. Apple Upgrade changes the fundamental structure. It is a true lease: customers make monthly payments, but they do not own the device unless they choose to pay a final "purchase option fee" at the end of the term.
"At Apple, we put the customer at the center of everything we do," said Karen Rasmussen, Apple's vice president of the Apple Store online, in a statement. "We're thrilled that Apple Upgrade offers our customers, both online and in-store, a more flexible way to pay for the products they love."
Pricing and Terms
Apple Upgrade offers tiered lease terms depending on the product category:
- iPhone and Apple Watch: 12- or 24-month leases
- Mac and iPad: 24- or 36-month leases
Monthly payments start as low as $17.99 for iPhone, $11.99 for Apple Watch, $24.99 for iPad, and $24.99 for Mac.
For example, a 256GB iPhone 17 Pro with a retail price of $1,099 would cost approximately $31.99 per month on a 24-month lease, or $45.99 per month on a 12-month lease. A 14-inch MacBook Pro starts at $38.99 per month on a 36-month term.
Customers can reduce their monthly payments further by trading in an existing device at enrollment, with the trade-in value applied across the lease term. Those paying with Apple Card will also earn 3% Daily Cash back on their lease payments.
What Happens at the End?
At the conclusion of the lease, customers face three choices:
- Upgrade to a new device by returning their current one and entering a new lease.
- Return the device and walk away.
- Buy out the device with a one-time purchase option fee equal to the original price minus all lease payments already made.
If a customer takes no action, the lease automatically converts to a month-to-month extension for up to six months — though monthly payments may increase during this period. If no action is taken after that extension, Klarna will automatically charge the purchase option fee.
Key Changes from the Old Program
The shift from the iPhone Upgrade Program to Apple Upgrade brings several notable differences:
- No included AppleCare+: Unlike its predecessor, Apple Upgrade does not bundle AppleCare+ into the monthly cost. Customers must purchase protection separately, either as AppleCare+ for individual devices or through the multi-device AppleCare One plan.
- Soft credit check only: Enrollment requires only a soft inquiry that won't impact credit scores, though approval is still subject to creditworthiness.
- Unlocked but carrier-tethered: Leased iPhones remain unlocked, allowing customers to switch between AT&T, T-Mobile, and Verizon at will. However, a postpaid plan from one of those three carriers is mandatory at checkout — prepaid plans are not eligible.
- Broader product scope: The program now covers Mac and iPad in addition to iPhone and Apple Watch, though some models — including the iPhone 16, iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, and Studio Display — are excluded.
Industry Reaction: Convenience vs. Cost
The launch has already sparked debate among consumers and financial observers. Proponents argue that the lower monthly payments make Apple's increasingly expensive hardware more accessible, particularly for Macs and iPads that previously lacked any direct Apple financing path beyond full purchase or Apple Card Monthly Installments.
Critics, however, note that the lease structure creates a psychological nudge toward perpetual upgrading. Because the buyout price at the end of a 24-month iPhone lease can still be several hundred dollars — for example, roughly $433 for an iPhone 17 Pro Max after 24 payments of $34.99 — many customers may find it easier to simply return the device and start a new lease rather than pay the lump sum to keep a two-year-old phone.
"If someone doesn't have $400 to buy out the residual, then they roll into another two-year payment," one user noted on a popular tech forum. "It's the same playbook car dealerships have used for decades: never ask how much the car costs, ask how much someone wants to pay per month."
Others see it differently. "I don't want to own my phone," another user countered. "As long as the camera gets better every year, I'm going to want a better camera. This removes the hassle of selling or trading in."
The End of an Era
With the launch of Apple Upgrade, Apple has officially discontinued the iPhone Upgrade Program and iPhone Payments in the United States. Current iPhone Upgrade Program members are not being forced to migrate immediately, but they will need to choose a new path — whether Apple Upgrade, Apple Card Monthly Installments, carrier financing, or outright purchase — at their next upgrade cycle.
For now, Apple Upgrade is available exclusively in the United States (excluding territories) through the Apple Store online, the Apple Store app, and physical Apple Store locations. There has been no announcement regarding international expansion.
Whether customers embrace this new lease-over-own model will likely depend on how they already treat their devices: as long-term investments to be kept for years, or as transient tools to be regularly refreshed. Apple has made its bet clear — and it's banking on the latter.
