Apple is set to launch a device leasing program called Apple Upgrade on July 28, supporting most iPhone, Mac, iPad, and Apple Watch models, with financial backing provided in partnership with Klarna. Apple plans to market Apple Upgrade as a way to purchase devices with lower monthly payments. Following the announcement, Klarna's stock price initially surged by 11%, ultimately closing up 1.44%; Apple's stock closed up 0.35%.
Apple is preparing to launch a device leasing program named Apple Upgrade, which will represent one of the most significant adjustments to the company's device sales model in its history.
According to Bloomberg, citing informed sources, this new service is scheduled to go live on July 28 and will support most iPhone, Mac, iPad, and Apple Watch models. Apple will collaborate with the Swedish fintech company Klarna Group, which will provide the financial support.
The program will initially launch at least in the U.S. market, covering both Apple's physical retail stores and its online store. After the news broke, Klarna's stock price briefly rose by 11%, but the gains were not sustained, closing up only 1.44%; Apple's stock remained largely flat, closing up 0.35% on Tuesday.
Mechanism and Lease Details
Apple Upgrade will adopt a model similar to a subscription service.
Users can pay off the device early, upgrade to a new model ahead of schedule during the lease term, or keep the device at the end of the lease period; some of these actions will incur additional fees. Similar to car leasing, users can also return the device at the end of the lease term.
Specifically, the lease term for iPhones and Apple Watches will be 24 months, while for Macs and iPads it will be 36 months. Users will need to pass a soft credit check (which does not affect their credit score) to qualify.
Background and Policy Adjustments
The launch of this program comes as Apple has just raised prices by hundreds of dollars on multiple products, including Macs and iPads, due to industry-wide memory chip shortages. The market also widely expects Apple to further increase prices when it releases the next-generation iPhone in September.
Apple plans to promote Apple Upgrade as a way to purchase devices with lower monthly payments. Simultaneously, the company also plans to stop accepting new user registrations for two existing iPhone purchase plans—the iPhone Upgrade Program and the standard installment financing service—to make way for Apple Upgrade.
Unlike the current iPhone Upgrade Program, Apple Upgrade does not include AppleCare+ coverage. Additionally, some products are not eligible for this program, including the Apple Watch SE, entry-level iPads, the iPhone 16, and the MacBook Neo. Corporate purchases and educational discount orders are also excluded.
Apple had previously considered launching an iPhone and hardware subscription plan with its own financing, but canceled it in 2024. Now, by choosing to partner with Klarna, Apple can offer consumers a new way to purchase devices without having to assume the associated financial risks itself.
Comments