Apple set July 28 for Apple Upgrade, a financial partnership with Klarna that shifts how shoppers acquire iPhones, Macs, iPads, and Apple Watches in the United States. Rather than paying upfront or taking out long loan agreements, buyers can select subscription-style device leases through physical stores or Apple’s online shop. This pivot arrives right as rising AI data center demand inflates memory chip costs, forcing higher hardware price tags across MacBooks and iPads.
The financial agreement splits contract lengths based on product categories. Smartphones and wearables carry 24-month terms. Mac computers and tablets run across 36-month periods. Interested buyers must complete a soft credit check during checkout, an inquiry that bypasses traditional credit score damage.
Leaseholders gain flexibility throughout their payment term. Customers can clear their remaining balance early, turn in hardware for a newer generation model mid-contract, or hand back devices at the end of the term. Buying out the remaining value keeps the hardware permanently, though specific early trade-in or return fees remain undisclosed for now.
Protection policies work differently under this new agreement. AppleCare+ stays separate from monthly charges, requiring customers to purchase warranty coverage independently. That marks a direct change from the older iPhone Upgrade Program, which bundled hardware insurance directly into recurring payments.
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Not every product qualifies for the program. Apple excluded the budget MacBook Neo, the entry-level iPad, the iPhone 16, and the Apple Watch SE. Enterprise and educational buyer channels remain completely off-limits as well.
This rollout effectively closes the door on Apple’s previous consumer payment options. New sign-ups for the legacy iPhone Upgrade Program and standard monthly financing close down permanently, making Klarna’s lease model Apple’s main financing push for consumer hardware.
Source: Bloomberg
