The Apple Upgrade lease is drawing scrutiny because the new program, offered through Apple with Klarna as partner, does not work like the old iPhone Upgrade Program or many buy-now, pay-later checkout loans. Damon Beres, writing in The Atlantic, described Apple Upgrade as a “trap” because customers rent a device and do not own it until the final payment is made.
Apple Upgrade replaces Apple’s discontinued iPhone Upgrade Program, according to Beres. The older iPhone plan was a loan arrangement, with Citizens Bank as Apple’s bank partner, according to Apple’s legal materials cited by Daring Fireball. Klarna is better known for buy-now, pay-later loans at retailers, and Beres noted that Klarna’s payment plan for Samsung Galaxy phones is also a loan-style product.
The difference with Apple Upgrade is the legal structure. Beres wrote that Apple’s plan is a lease: a customer makes monthly payments, but the Mac or Apple Watch is not owned until the remaining balance is paid at the end.
How does the Apple Upgrade lease work?
Under the example discussed by Beres, a 14-inch MacBook Pro with a $1,999 Apple retail price can be leased for 24 months at $54 a month. Those payments add up to $1,296, leaving a $703 balance if the customer wants to buy the device at the end of the term.
Beres contrasted that with Best Buy, which he said had the same MacBook Pro on sale for $1,849 and offered an 18-month repayment plan with $103 installments. In his framing, Apple’s monthly payment looks lower while the customer still owes money after two years.
Daring Fireball pushed back on that comparison, arguing that the cheaper Best Buy total comes from the retailer’s lower sale price rather than from any hidden cost in Apple’s lease. In that view, the arithmetic is straightforward: Apple is charging its $1,999 retail price over time, while Best Buy is selling the same machine for $1,849.
The post also argued that Apple Upgrade does not appear to add an interest penalty compared with paying Apple’s full price up front. If a customer pays $1,296 over 24 months on a $1,999 MacBook Pro and then pays the remaining $703, the total still reaches $1,999.
The real behavioral hook is what happens after the term ends. A customer can pay the residual balance and own a two-year-old device, or return it and begin a new lease on a newer one. Daring Fireball argued that this likely benefits Apple by encouraging customers to refresh devices every two years instead of keeping fully paid-off hardware longer.
That is the practical catch, if there is one: Apple Upgrade changes the default rhythm of ownership. It turns the end of a payment term into a decision point, and Apple has every reason to make the next lease feel easier than writing a final check for older hardware.
This story draws on original reporting from Daring Fireball.
