Apple Shifts Hardware Strategy with New Leasing Program
Apple is preparing to launch “Apple Upgrade,” a new device leasing program that marks a significant shift in how the company sells hardware. According to a report by Bloomberg, the service is expected to debut on July 28, covering a wide range of products including most iPhone, Mac, iPad, and Apple Watch models. The initiative relies on a partnership with Klarna, a Swedish fintech firm specializing in “buy now, pay later” payment models.
This move comes as Apple looks to lower the barrier to entry for its premium hardware. While the program will initially be available only in the United States, both in retail stores and online, the announcement triggered a noticeable market reaction. Klarna shares rose by a double-digit percentage to a higher value following the news, while Apple’s stock price remained largely stable.
How the Apple Upgrade Subscription Model Works
The Apple Upgrade program functions similarly to a subscription service. Users can pay off their devices ahead of schedule, upgrade to newer models earlier than traditional cycles allow, or choose to keep the device once the leasing term concludes. In some scenarios, users may face additional fees, or they can opt to return the hardware at the end of the term, mirroring standard vehicle leasing agreements.
The structure of the payment plans varies by device category:
- iPhone and Apple Watch: 24-month leasing terms.
- Mac and iPad: 36-month leasing terms.
Prospective participants will undergo a credit check before being approved for the program. This rollout follows recent price increases for Macs and iPads, and industry expectations suggest Apple may increase iPhone prices when it unveils new models in September.
Did you know? Unlike the existing iPhone Upgrade Program, the new Apple Upgrade service will not include AppleCare coverage.
Transitioning Away from Legacy Financing
Apple plans to position this new program as a method to provide lower monthly payments compared to its current financing options. To streamline this transition, the company intends to stop accepting new enrollments for its existing iPhone Upgrade Program and its standard financing plans.
However, the program will not be universal across all product lines. Certain devices—including the Apple Watch SE, entry-level iPads, the iPhone 16, and the MacBook Neo—are excluded from the initial offering. Furthermore, the program will not be available for institutional, corporate, or educational purchases.
Frequently Asked Questions
Is AppleCare included in the new Apple Upgrade program?
No. Unlike the current iPhone Upgrade Program, the new Apple Upgrade service does not bundle AppleCare coverage into the subscription.
Which devices are excluded from the program?
The program currently excludes the Apple Watch SE, entry-level iPad models, the iPhone 16, and the MacBook Neo. Purchases made for corporate or educational purposes are also ineligible.
How long are the payment terms?
Payment terms are tiered by device type: 24 months for iPhones and Apple Watches, and 36 months for Macs and iPads.
Do I need a credit check to participate?
Yes, according to the reporting, users must undergo a credit evaluation to qualify for the program.
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