Apple shifts US device financing to Klarna lease-to-own model
The tech giant introduces a subscription-based leasing structure managed by payment provider Klarna, with iPhone leases starting at $17.99 monthly. The move follows recent price hikes for iPads and Macs attributed to a global memory shortage.
Apple has announced the launch of Apple Upgrade, a new subscription-based leasing service in the United States, marking a significant shift in how consumers finance its hardware. Developed in partnership with payment provider Klarna, the programme replaces the legacy iPhone Upgrade Program and standard financing options for new enrollees. Current participants in the previous iPhone Upgrade Program remain grandfathered into their existing terms, ensuring continuity for those already enrolled.
Under the new structure, customers can lease iPhones for $17.99 per month. The leasing model extends to other devices in the ecosystem, with monthly rates set at $11.99 for the Apple Watch and iPad, and $24.99 for the Mac. This pricing strategy positions Apple to offer lower upfront costs for consumers, although the specific lease term lengths for these monthly rates have not been disclosed in the initial announcement.
The service is accessible via the Apple Store online, the Apple Store app, and physical Apple Store locations. Management of the leases is handled directly through the Klarna app, which provides users with visibility into billing schedules and remaining payment balances. Enrollees can further reduce their monthly costs by trading in existing devices via the Apple Trade In program and are eligible to earn 3% Daily Cash rewards.
This announcement follows recent price increases for iPads and Macs, which Apple attributed to a global memory shortage impacting hardware costs. The introduction of the Klarna partnership marks a strategic pivot in US device financing, moving away from traditional installment plans for new customers toward a more flexible, subscription-like model.
The move was anticipated by industry analysts, with Bloomberg’s Mark Gurman previously reporting that Apple was preparing a lease-to-own program. By integrating Klarna’s payment infrastructure, Apple aims to streamline the acquisition process for its hardware, potentially influencing consumer spending habits in the face of rising component costs.
