Apple Launches Klarna-Backed Leasing Program for Devices

Apple Introduces Apple Upgrade

Apple has revealed Apple Upgrade, a new leasing program backed by Klarna, designed for iPhones, iPads, Macs, and Apple Watches. This initiative ends new enrollments in Apple’s previous iPhone Upgrade Program. The change provides customers with more upgrading options. However, it also presents a key question: will this lease offer users cost savings?

What is Apple Upgrade?

Apple Upgrade is a leasing option collaborating with Klarna, allowing users to pay monthly for their devices. Available devices include iPhones, iPads, Macs, and Apple Watches, with varying lease terms based on the product. At the lease’s end, customers can upgrade, buy the device, or return it and exit the program. This service is accessible online, via the Apple Store app, and in Apple stores across the United States.

Applicants undergo a soft credit check that won’t affect their credit score. The introduction of the program coincides with the end of the iPhone Upgrade Program, previously allowing iPhone financing over 24 months with upgrade eligibility after 12 payments.

Apple Upgrade vs. iPhone Upgrade Program

The most notable comparison for yearly iPhone upgraders is the cost. Apple’s clarified pricing indicates that Apple Upgrade leases are approximately $11 cheaper per month for the iPhone 17 Pro Max series compared to the iPhone Upgrade Program.

Why the New Program Seems Cheaper

The lower monthly payment is largely because the former iPhone Upgrade Program included AppleCare+ with Theft and Loss in the monthly fee. Existing program users will continue receiving this coverage while their agreements are active. Under Apple Upgrade, AppleCare+ is optional and not included. Reports suggest that coverage for current Pro models costs $13.99 monthly or $139.99 annually. Thus, the apparent $134 annual saving could be nullified by purchasing separate coverage.

What Happens at the End of the Lease?

Key differences between the programs involve ownership. The iPhone Upgrade Program was a 24-month financing, leading to device ownership after final payments. Apple has stated that current members can continue until ownership is achieved. Apple Upgrade, however, is a lease through Klarna, with users able to choose to purchase, return, or lease another device at term end. Customers can reduce payments with a trade-in and earn a 3% Daily Cash when using an Apple Card.

Apple’s Intentions

Apple claims the program offers enhanced flexibility, expanding upgrade-style payments to include not only iPhones but also Macs, iPads, and Apple Watches. Lease pricing starts at $17.99 for iPhone, $11.99 for Apple Watch, $24.99 for Mac, and $11.99 for iPad. Newsweek has reached out to Apple for commentary and awaits a response.

The Key Consideration

For frequent iPhone upgraders, Apple’s new Klarna-backed lease may appear $134 cheaper annually, per advertised figures. Yet, adding back AppleCare+ reduces this cost benefit. The significant shift leans away from a bundled protection model leading to ownership, towards a flexible leasing strategy promoting recurring upgrades.