CUPERTINO, Calif. — Apple is expanding its consumer financing strategy with a new lease-to-own program backed by Klarna that will allow U.S. customers to upgrade iPhones, Macs, iPads and Apple Watches through monthly payments beginning July 28, according to multiple published reports.
The new program, called Apple Upgrade, is designed to function more like an automobile lease than a traditional installment loan. Customers will be able to make monthly payments, pay off devices early, upgrade to newer hardware before the end of the lease in some cases, or keep or return the device once the lease term expires, Reuters reported, citing a Bloomberg News report.
The initiative comes as Apple seeks to stimulate hardware sales after recently increasing prices on many of its products amid higher component costs, particularly for memory and storage chips used in artificial intelligence-enabled devices, according to Reuters.
Klarna, the Swedish financial technology company known for its consumer financing products, will serve as the financial backer for the program, assuming the credit risk associated with customer financing, Reuters reported. Neither Apple nor Klarna immediately commented publicly on the reports.
What’s Involved
According to Reuters and other reports, Apple Upgrade will:
- Cover most iPhone, Mac, iPad and Apple Watch models.
- Offer 24-month lease terms for iPhones and Apple Watches.
- Offer 36-month lease terms for Macs and iPads.
- Allow customers to upgrade early, purchase the device at the end of the lease or return it.
- Be available through Apple’s retail stores and online beginning July 28 in the United States.
- Require a soft credit check through Klarna.
Some lower-priced devices—including the Apple Watch SE, entry-level iPad, iPhone 16 and MacBook Neo—will not be eligible for the program, according to Reuters. Business and education purchases also are expected to be excluded.
A Shift in Strategy
The program also represents a shift in Apple’s financing strategy. Reuters reported the company plans to discontinue new enrollments in its current iPhone Upgrade Program and standard financing options in favor of the new leasing model. Unlike the existing iPhone Upgrade Program, Apple Upgrade will not include AppleCare coverage.
Apple has increasingly relied on outside financing partners after discontinuing its own Apple Pay Later service in 2024. The company now offers consumers financing options through providers including Klarna and Affirm for eligible Apple Pay purchases.
Industry analysts say the lease-style model could make Apple’s higher-priced devices more affordable by lowering monthly payments while encouraging more frequent upgrades, potentially helping the company maintain hardware sales as device prices continue to rise.
