Apple Launches Klarna-Backed 'Apple Upgrade' Leasing

Apple has launched Apple Upgrade, a new device leasing program built in partnership with Klarna, covering iPhone, iPad, Mac, and Apple Watch. The rollout is available today in the United States online, through the Apple Store app, and in physical Apple Store locations.

What's changing

Apple Upgrade replaces the company's in-house financing options. The iPhone Upgrade Program, which launched in 2015, has stopped accepting new enrollments, and Apple is discontinuing iPhone Payments in the US as well. Going forward, billing and payment tracking for leased devices are managed directly through the Klarna app rather than Apple's own systems.

Under the new program, customers pass a soft credit check to qualify. At the end of a lease term, they can upgrade to a new device, buy out the current one with a one-time payment, or return it and exit. Apple Card holders earn 3% Daily Cash back on lease payments made with the card.

Starting prices

iPhone leasing starts at $17.99/month (iPhone 17e cited as example)
Apple Watch leasing starts at $11.99/month (Series 11 cited as example)
iPad leasing starts at $11.99/month (iPad Air cited as example)
Mac leasing starts at $24.99/month (MacBook Air cited as example)

Conflicting reports on lease terms

Sources differ on the exact lease durations. The Verge reports that iPhone and Apple Watch leases run 24 months, while Mac and iPad leases run 36 months, with no mention of shorter alternatives. TechCrunch, however, reports that iPhone and Watch leases offer both one- and two-year (12/24 month) options, while Mac and iPad leases offer two- and three-year (24/36 month) options. It remains unclear whether the shorter terms cited by TechCrunch are still available alongside the longer terms The Verge describes.

Timing and context

Apple Upgrade arrives just weeks after the company raised prices on MacBooks, iPads, and other devices — pricing Tim Cook reportedly called "unsustainable." The proximity of a leasing rollout to a round of price hikes has drawn attention, as it could be read as a way to soften the impact of rising hardware costs by spreading them into monthly payments.

Notably, the leasing plan does not include an AppleCare warranty extension, which could raise out-of-pocket repair or damage costs for lessees compared to Apple's prior financing options.

A red flag buried in code

Code found in the iOS 27 beta suggests Apple may be developing a mechanism to lock financed iPhones out of apps if lease payments fall into arrears. This isn't confirmed to ship, and how such a system would function is unclear, but it points to a possible future where device usability is directly tied to payment status — a notable shift given Apple's reliance on Klarna's external credit infrastructure to underwrite the leases.

What's still unclear

Several details remain unaddressed in current reporting: total cost of leasing versus outright purchase, whether Apple Upgrade will expand beyond the US, the specific credit criteria and approval rates, and how existing iPhone Upgrade Program customers will transition to the new system.

Why founders should care

For early-stage founders — particularly those in fintech, consumer hardware, or subscription commerce — this move is likely worth tracking closely, even though it's Apple's story to tell, not yet a broad market signal.

Apple's decision to outsource financing to Klarna rather than keep it in-house may suggest that even large consumer tech companies increasingly see standalone credit and leasing infrastructure as a specialized capability better handled by partners — a dynamic that could favor B2B fintech and BNPL-adjacent startups building white-label leasing tools.
The soft-credit-check leasing model, if it gains traction with Apple's customer base, could serve as an early indicator of broader consumer appetite for BNPL-style financing on premium hardware — a trend worth monitoring for founders building device-subscription or hardware-as-a-service products.
The appearance of code that could lock financed devices for non-payment hints at a possible future direction for enforcement mechanisms in consumer hardware financing. If this pattern spreads, founders offering device leasing or subscription hardware may want to consider how (and whether) to build similar safeguards — and weigh the trust and UX tradeoffs carefully.
The timing relative to Apple's price increases raises a plausible, though unconfirmed, hypothesis: leasing programs may increasingly be used industry-wide to cushion consumer reaction to rising hardware costs. Founders pricing physical products at higher price points may find it useful to watch how customers respond to Apple's rollout as a proxy for demand elasticity.

None of these signals are conclusive on their own, but together they suggest hardware financing and BNPL-style leasing are becoming more normalized at the highest end of consumer tech — a trend with plausible spillover effects for smaller players building in adjacent spaces.