Apple Replaces iPhone Upgrade Program with Klarna-Backed Leasing Service
The tech giant has partnered with payment firm Klarna to launch an interest-free leasing model for iPhones, iPads, Macs, and Apple Watches, marking a significant shift from its previous device ownership scheme.
Apple has officially discontinued its iPhone Upgrade Program, replacing it with the Apple Upgrade Program, a new interest-free leasing service developed in partnership with Klarna. The move introduces a broader range of eligible devices, including iPads, Apple Watches, and Macs, alongside iPhones, aiming to provide customers with more flexible access to the company’s hardware without the burden of large upfront capital outlays.
Under the new structure, monthly costs are significantly reduced compared to the previous iteration. Monthly payments for iPhones now start at $17.99, a notable decrease from the previous program’s lowest rates which hovered around $30. Leasing options for Apple Watches and iPads begin at even lower thresholds, starting at $11.99 per month. These figures come as Apple seeks to mitigate the impact of recent sharp price increases across its product lines.
A fundamental shift in the program’s mechanics is the removal of device ownership at the end of the contract term. Unlike the previous system, where payments contributed toward eventual ownership, the Apple Upgrade Program is strictly a lease. Users can choose to return the device, upgrade to a new model upon contract expiry, or purchase the device outright with a one-time payment once the term concludes.
The new program also alters the inclusion of insurance and carrier requirements. AppleCare protection is no longer bundled with the lease and must be purchased separately. Apple advises that leased devices returned in damaged condition will incur fees, though the specific cost differentials for devices with or without AppleCare remain unspecified. Furthermore, activation is restricted to major US carriers, specifically AT&T, T-Mobile, and Verizon.
Lease terms are structured by device type, with iPhones and Apple Watches offering 12 to 24-month contracts, while iPads and Macs provide 24 to 36-month terms. Klarna conducts a soft credit check during the application process, which does not impact the user’s credit score. Existing enrollees in the old iPhone Upgrade Program can continue their current payments until their contracts expire, at which point they may transition to the new system.
