Apple’s new Apple Upgrade program is now available in the United States, replacing new availability of the iPhone Upgrade Program and iPhone Payments. The change matters because the old iPhone-only arrangement was a loan, while the new product is a lease provided by Klarna. Paying the monthly bill does not, by itself, make the device yours.
Apple announced the program on July 28. It covers eligible iPhones, Apple Watches, Macs and iPads, and is available through Apple’s online store, Store app and U.S. retail locations. Applicants receive a soft credit inquiry, which Apple says does not affect their credit score.
How does the Apple Upgrade program work?
Customers choose a device and a lease term: 12 or 24 months for an iPhone or Apple Watch, and 24 or 36 months for a Mac or iPad. Apple lists lease prices starting at $17.99 a month for iPhone, $11.99 for Apple Watch and iPad, and $24.99 for Mac. A trade-in can reduce the initial monthly payment, according to Apple.
At the end of the term, the customer has three paths: start a new lease and return the old device, return it and leave the program, or pay a purchase-option fee through Klarna to keep it. Apple says that fee equals the device’s price at signing, minus payments already made and any remaining trade-in credits, plus tax. That is the bit beneath the friendly monthly-payment copy: lease payments are not the same thing as ownership financing.
For scale, Apple lists an iPhone 17 Pro at $45.99 a month for 12 months. That adds up to $551.88 in scheduled lease payments, before tax, trade-in effects, optional AppleCare, any fees or a purchase-option payment. It is not a total cost of ownership.
A no-fee upgrade becomes available after every payment in the selected term has been made. Customers who upgrade early or exit early can face a fee up to their remaining lease payments and must return the device. When upgrading, the old device must be in good working condition and returned within 14 days of receiving the replacement. Miss that deadline and Apple says payments on the original lease continue alongside the new one.
What happens to current iPhone Upgrade Program members?
Apple says existing members need take no immediate action. Their Citizens One loan remains active through its 24-month term, and the iPhone becomes theirs after 24 payments. AppleCare financed in that existing loan remains active for the full term if the loan stays in good standing or is paid off.
When eligible for another iPhone, those members can choose Apple Upgrade, Apple Card Monthly Installments, a direct purchase or carrier financing. Apple says Apple Card Monthly Installments for a next iPhone requires an Apple Store visit and is not currently supported online.
AppleCare is available as an optional subscription under Apple Upgrade, rather than described as included in the lease. Apple says a device returned damaged without AppleCare can incur a one-time damage fee from Klarna; an AppleCare-covered device may still carry a service fee after assessment. New iPhone leases also require activation with AT&T, T-Mobile or Verizon.
This story draws on original reporting from Daring Fireball.
