Apple Launches 'Apple Upgrade' Leasing Service in U.S. Partnership with Klarna

Apple has launched "Apple Upgrade," a new device leasing service in the United States developed in partnership with financial firm Klarna. The program allows consumers to rent iPhones, iPads, Macs, and Apple Watches for a monthly fee rather than purchasing them outright.

Under the new terms, monthly plans start at $17.99 for iPhones, $11.99 for Apple Watches, $11.99 for iPads, and $24.99 for Macs. The service replaces the previous iPhone Upgrade Program and iPhone Payments, expanding the leasing model across Apple's entire hardware lineup. Users have the option to swap their current hardware for new models after 12 or 24 months for iPhones and Apple Watches, and after 24 or 36 months for Macs and iPads. To incentivize the use of Apple's own financial ecosystem, the company offers 3 percent Daily Cash back to users who pay their lease via an Apple Card. However, the program includes strict maintenance requirements; devices must be returned in good condition, or users will be charged for damage and wear and tear.

The Shift to Hardware-as-a-Service

This transition is part of a broader strategic shift under CEO Tim Cook to move Apple toward a subscription-based ecosystem. As consumer electronics generally become more expensive and Apple continues to implement price increases across its product lines, monthly rental options have become a more attractive alternative for consumers unable to afford high upfront costs. By integrating with Klarna, Apple is leveraging third-party financing to lower the barrier to entry for its latest hardware.

Implications for Ownership

Industry critics argue that this move represents a fundamental shift from ownership to leasing, which may erode consumer agency. By controlling the entire lifecycle of the device and capturing its subsequent resale value, Apple can maximize profit margins while locking users more deeply into its ecosystem. Kyle Wiens, CEO of iFixit, noted that Apple is using its cash advantage to turn consumers into renters rather than owners, a move he claims will cost people both money and agency because Apple knows exactly what these devices are worth after a year of use.

What to Watch

As Apple Upgrade rolls out, the industry will be watching to see if this model expands to other regions outside the U.S. While the core terms of the lease are established, the specific costs associated with early lease termination remain a point of scrutiny, as sources indicate substantial fees may apply for those attempting to exit the agreement prematurely. Whether this "financialization" of hardware becomes the standard for the rest of the consumer electronics industry remains to be seen.