Apple has launched Apple Upgrade, a lease program for customers in the United States who want a new iPhone, iPad, Mac or Apple Watch for a monthly payment instead of buying the hardware outright. The Apple Upgrade lease is backed by Klarna, the financial company best known for buy-now, pay-later products, and it pushes Apple’s hardware business further into subscription-style territory.
Apple announced the program Tuesday. Bloomberg’s Mark Gurman had reported the plan a week earlier. Under the program, customers pay monthly for a device and can exchange it for newer hardware after either one year or 24 months, depending on the plan. Apple says customers who want to change devices before 12 months can do that for an additional fee.
How does Apple Upgrade work?
Apple Upgrade is a rental arrangement, not a standard installment purchase. Customers pay each month to use the device, can trade in an existing device to reduce the monthly cost, and must return the leased hardware in the condition required by Apple when they are done with it.
The starting prices Apple listed are $18 per month for iPhones, $12 per month for Apple Watches, $25 per month for Macs and $12 per month for iPads. Apple says iPhones obtained through the program are unlocked, so they are not tied to a wireless carrier and can be used internationally. The company is also offering 3 percent daily cash back when customers pay with Apple Card.
The math is where the shine starts rubbing off. A $18 monthly iPhone lease over 24 months totals $432 for the $599 iPhone 17e. That lower cash outlay does not mean the customer owns the phone at the end. WIRED noted that iPhones typically retain resale value well, which can make buying and later selling a device more attractive than renting it. Apple’s terms also leave room for extra charges if the returned device shows wear beyond what the company accepts. Customers can pay more each month to add AppleCare coverage.
What happens to the iPhone Upgrade Program?
Apple Upgrade replaces Apple’s existing iPhone Upgrade Program, which let customers pay installments toward new iPhone models. Apple says current participants do not need to do anything and can keep making payments until their 24-month term ends.
Customers whose current plan allows an upgrade will still be offered a way to get a new device, according to Apple. They can also keep paying off the existing loan and retain the device. Apple says customers may switch from the iPhone Upgrade Program to Apple Upgrade through their Apple account.
The ownership question is the part repair advocates are watching. Kyle Wiens, chief executive of iFixit, told WIRED that Apple is using its financial position to move customers away from owning their devices and toward renting them. He argued that the shift costs users both money and control, because Apple understands the resale value of its hardware after a year and can price the program around that.
Apple told WIRED that the current memory shortage was not the reason for Apple Upgrade. The program still arrives after Apple raised prices on several products, at a moment when consumer electronics are getting more expensive. Renting can make the monthly number look less painful, which is exactly why lenders like this model.
Whitney Barkley-Denney, deputy director at the nonprofit Center for Responsible Lending, described the trend to WIRED as part of a broader financialization of affordability problems. She said smaller payments through services such as Klarna, Affirm and Afterpay can accumulate into larger financial strain, especially when people use borrowing tools for ordinary purchases.
Wiens offered WIRED a lower-drama alternative: buy refurbished devices, use them for as long as practical, repair them when they fail and resell them when finished. Apple’s new program gives customers another route to new hardware. It also gives Apple another reason for that hardware to come back home.
This story draws on original reporting from WIRED.
