According to a report from Bloomberg’s Mark Gurman, Apple is gearing up to launch a new device leasing program called “Apple Upgrade” that will dramatically change how customers purchase the company’s most popular hardware. The program, set to debut on July 28, 2026, will operate similarly to a car lease: customers pay a monthly fee to use a new device, with options to upgrade to a newer model early, keep the device at the end of the lease term, or return it. The financial backing for this program will come from Klarna, a buy-now-pay-later provider, and signing up will require a soft credit check to verify eligibility.
Apple Upgrade is reportedly designed to replace the existing iPhone Upgrade Program, which has been running for over a decade. The current program allowed customers to spread the cost of a new iPhone over 24 months with the option to trade in after 12 months for a newer model, always including AppleCare+. The new program expands beyond iPhones to include Macs, iPads, and Apple Watches, but with some notable changes and exclusions. For iPhones and Apple Watches, the lease term will be 24 months, while iPads and Macs will have a longer 36-month term, reflecting the longer upgrade cycles typically associated with those product categories.
One major difference is that Apple Upgrade will not include an AppleCare+ subscription. This is a significant shift from the previous iPhone Upgrade Program, which bundled AppleCare+ into the monthly payment. With AppleCare+ prices also on the rise, this could make the lease payments lower upfront but leave customers without extended warranty coverage unless they purchase it separately. Additionally, the program will not be available for budget-focused devices such as the base iPad, the iPhone 16, the Apple Watch SE, and the fast-selling MacBook Neo. This exclusion suggests Apple is targeting the program at its higher-margin, premium devices, encouraging customers to invest in the Pro and Air lines.
The timing of this announcement is notable. Just a month earlier, Apple raised prices on nearly all its products, including Macs, iPads, and accessories, citing component and RAM shortages. The iPhone was not part of that price increase, but the upcoming iPhone 18 Pro series, expected later this year, could set new pricing benchmarks. By introducing a leasing program, Apple may be trying to make its devices more accessible despite rising costs, allowing customers to pay over time without the large upfront expense. The lease structure also gives Apple a steady stream of recurring revenue and ensures that customers return older devices, which Apple can refurbish or recycle.
Leasing electronics is not a new concept. Carriers like AT&T and Verizon have offered device installment plans for years, and Google has its own Pixel Pass program that bundles a phone with services. However, Apple’s direct-to-consumer leasing approach bypasses carriers and gives the company full control over the terms and customer experience. The partnership with Klarna adds a modern fintech twist; Klarna is known for its “buy now, pay later” services, but here it acts as the financial backer rather than just a payment method. This could indicate that Apple is exploring alternative financing models to attract customers who may not qualify for traditional credit or prefer flexible payment schedules.
Eligibility for Apple Upgrade will reportedly require a soft credit check, which does not affect credit scores. Klarna will evaluate each applicant based on their financial history. Once approved, customers can choose their lease term and device. At any point during the lease, they may have the option to upgrade to a newer model, similar to the “early upgrade” options offered by carriers. This flexibility is a major selling point for early adopters who want the latest technology without being locked into a full purchase.
Gurman’s report also suggests that Apple Upgrade will replace not only the iPhone Upgrade Program but also standard financing options available through Apple Card Monthly Installments. The Apple Card, issued by Goldman Sachs, has faced some challenges recently, and Apple has been diversifying its financial partnerships. Klarna’s involvement might be part of a broader strategy to offer more accessible financing without relying solely on traditional banks.
From a consumer perspective, the program has clear advantages: no large upfront cost, the ability to switch devices frequently, and the peace of mind of returning a device at the end of the lease. However, there are also drawbacks. Without AppleCare+, customers must pay for repairs or buy separate insurance. Leasing long-term may also cost more than buying outright, depending on the resale value of the device. Additionally, if a customer decides to keep the device after the lease, they will likely need to pay a residual amount to own it, similar to a car lease buyout.
The program’s impact on the secondary market could be significant. If many customers return their devices, Apple will have a large inventory of used hardware to refurbish and sell as certified pre-owned, potentially undercutting third-party resellers. This could also affect the trade-in values offered by carriers and other retailers.
Security and privacy are also considerations. Leased devices will presumably lock to the original owner’s Apple ID until the lease ends or the device is returned. Apple’s activation lock system already deters theft, and the lease program could integrate with that to ensure returned devices are properly wiped and reassigned.
The launch of Apple Upgrade comes at a time when consumer electronics prices are climbing due to inflation and supply chain constraints. By offering a lease-to-own model, Apple may be able to maintain sales volumes even as sticker shock pushes some customers to delay purchases. The program also aligns with a broader industry trend toward subscription models for hardware, as seen with Microsoft’s Xbox All Access and Amazon’s device payments.
It will be interesting to see how competitors respond. Samsung, Google, and other manufacturers may follow suit with their own leasing programs, especially if Apple Upgrade proves successful. Carriers, too, may need to adjust their installment plans to remain competitive.
Apple has not officially confirmed the program, but the July 28 date is only days away. If the report is accurate, customers will soon be able to walk into an Apple Store and lease the latest iPhone 18 Pro or a MacBook Air M4 with a simple monthly payment. The days of buying a phone outright or financing through a carrier may be fading, as Apple pushes toward a future where you never truly own your device—you just subscribe to the latest hardware.
Source: The Verge News