Apple Partners with Klarna to Launch Device Leasing Program
N.R. Finch
Apple plans to launch "Apple Upgrade," a device leasing service backed by Swedish buy-now-pay-later firm Klarna, on July 28. Covering iPhones, Macs, iPads, and Apple Watches, it marks Apple's biggest shift in hardware sales — swapping "buy" for "rent" as device prices climb.
How does this leasing plan actually work?
Lease terms vary by device: 24 months for iPhone and Apple Watch, 36 months for Mac and iPad.
Mid-lease, users can pay off early, upgrade to a newer model, or keep the device after the term ends — some options carry extra fees.
In plain terms = it works like a car lease — return the device at the end, or pay to keep it. Your choice.
Applicants must pass a soft credit check. The plan launches in the US first, available at Apple retail stores and online.
Why is Apple launching this now?
Apple has already raised prices on Macs and iPads due to an industry-wide memory shortage, and the market expects another price hike when new iPhones arrive in September.
This means → Apple needs a way to keep consumers spending as sticker prices rise. Leasing spreads a large upfront cost into lower monthly payments, lowering the psychological barrier.
Apple positions the plan as a lower monthly cost than its existing installment options, and will stop enrolling new users in the current iPhone Upgrade Program and standard installment plans.
Who bears the financial risk?
The lending partner is Klarna, the Swedish firm. Apple itself takes on no credit risk.
This reflects a lesson learned: Apple abandoned its own hardware subscription plan in 2024, unwilling to carry bad-debt exposure from financial services.
In plain terms = Apple sells devices and owns the experience; Klarna lends the money and absorbs the defaults — each does what it does best.
What are the restrictions to watch?
The new plan does not include AppleCare — repair costs for damaged devices fall on the user.
Several lower-end models are excluded: Apple Watch SE, entry-level iPad, iPhone 16, and MacBook Neo.
Enterprise and education purchases are also outside the plan's scope — this is a consumer-only offering.
What is the key thing to watch?
Whether leasing can effectively offset the demand drag from rising prices is the single most important proof point once this plan goes live.
This means → if monthly leasing makes consumers noticeably less sensitive to price hikes, Apple could turn leasing into the default mode for future hardware sales.
On the flip side, if users do the math and find leasing costs more over the full term — with no AppleCare included — the plan's appeal shrinks fast.
Content is for reference only, not financial advice.