Apple is launching a new device leasing program called Apple Upgrade on July 28, replacing the iPhone Upgrade Program with a broader, Klarna-powered financing option that covers most of its hardware lineup. The move marks what Bloomberg describes as “one of the biggest-ever changes to how the company sells devices.”
The new program functions like a car lease. You make monthly payments, and at the end of the term you can return the device, keep it, or upgrade early to something newer. A soft credit check is required to sign up, and some transactions will carry additional fees. AppleCare+ is not included, which is a meaningful departure from the iPhone Upgrade Program it replaces.
What the Program Actually Covers
Unlike the current iPhone-only Upgrade Program, Apple Upgrade spans most of Apple’s hardware lineup. Financing terms break down by device type:
- iPhones and Apple Watches: 24-month lease term
- iPads and Macs: 36-month lease term
Not every device qualifies though. The following are excluded from Apple Upgrade:
- iPhone 16 (entry-level)
- Entry-level iPad
- Apple Watch SE
- MacBook Neo
Apple is positioning this as a way to offer lower monthly payments than current financing options. Given that iPad and Mac prices already rose this year, and iPhone prices are expected to climb again when new models arrive in September, the timing reflects those increases.
The End of the iPhone Upgrade Program
Apple’s iPhone Upgrade Program, which launched in 2015, will stop accepting new sign-ups once Apple Upgrade launches. The old program was iPhone-only. Apple Upgrade replaces it and consolidates several standard financing options into a single offering, now powered by Klarna instead of Citizens Bank.
The one thing customers lose in the switch is AppleCare+. The iPhone Upgrade Program included AppleCare+ coverage as part of the deal; Apple Upgrade does not. For anyone who plans to add AppleCare+, that cost now sits on top of the monthly lease payment, which chips away at the “lower monthly payments” pitch Apple is making. On a high-end iPhone, AppleCare+ runs around $13, $14 per month, so the net difference from the old program may be smaller than Apple’s marketing will suggest.
Structurally, this differs from what Apple considered before. Bloomberg’s Mark Gurman reported that Apple spent two years, starting in 2022, developing an iPhone hardware subscription service before abandoning it. Apple Upgrade takes a different path: a true lease with defined terms and device return options, rather than an open-ended subscription. It keeps Apple further from the recurring-revenue model it was once pursuing.
Apple Upgrade goes live July 28 in the U.S. With iPhone prices expected to rise in September, the program’s timing is clearly designed to soften sticker shock before the new models are announced.
