Apple launches Upgrade leasing program, ends iPhone Upgrade Program

Apple introduced the Apple Upgrade leasing program on July 28, 2026, pricing iPhone leases as low as $17.99 per month and simultaneously retiring the long‑running iPhone Upgrade Program [1][2][4]. The move gives Apple a lease‑based revenue stream and aims to soften the impact of recent price hikes on consumer demand.

Leasing model replaces installment loan

The new Apple Upgrade program is a lease backed by Klarna, meaning Klarna retains ownership of the device while customers pay for its use [1][4]. By contrast, the discontinued iPhone Upgrade Program was an installment loan with payments applied toward purchase price and bundled AppleCare [1]. Under Apple Upgrade, users can choose one‑ or two‑year terms for iPhone and Apple Watch, and two‑ or three‑year terms for Mac and iPad, with the option to upgrade, buy outright, or return the device at lease end [2][3][4]. Apple also offers a 3 % Daily Cash rebate for Apple Card lease payments and lower base lease rates than the prior program [2][4].

Pricing, trade‑ins and market context

Lease prices start at $17.99 per month for an iPhone, $11.99 for an Apple Watch, $24.99 for a Mac, and $11.99 for an iPad [2][3][4]. These rates are lower than the monthly costs of the former iPhone Upgrade Program, which required full payments toward device ownership. Apple ties lease costs to trade‑in values, applying credits monthly to reduce payments [2][4]. The rollout follows Apple’s recent hardware price increases driven by a global memory‑chip shortage (“RAMageddon”), which pushed up Mac and iPad prices while sparing the iPhone [2][3]. By offering lower‑cost leases, Apple seeks to keep demand steady despite higher list prices.

Competitive implications

Apple’s shift mirrors the broader “buy‑now‑pay‑later” trend, leveraging Klarna’s BNPL expertise to compete with carrier‑offered upgrade plans. Competitors such as Samsung and Google already provide device‑leasing options in select markets, but Apple’s integration of trade‑ins, Daily Cash rewards, and optional AppleCare creates a differentiated value proposition. The lease model also aligns with Apple’s services strategy, potentially generating recurring revenue and deeper customer lock‑in through regular device turnover.

What to watch

• Rollout timeline – Expansion of Apple Upgrade beyond the United States and inclusion of newer device generations.
• Consumer uptake – Lease adoption rates versus legacy installment program participation.
• Competitive response – Whether carriers or rivals adjust their own upgrade or leasing offers in reaction to Apple’s Klarna partnership.

Apple’s transition to leasing signals a strategic pivot toward recurring revenue and price‑flexibility, but the success of the model will hinge on consumer acceptance and how quickly competitors adapt their financing arms.