Apple Launches 'Apple Upgrade' Leasing Service for Hardware Ecosystem

Apple officially launched "Apple Upgrade" on July 28, 2026, introducing a comprehensive device leasing subscription service in the United States. The move signals a strategic pivot toward a hardware-as-a-service model, allowing users to access the company's latest devices through recurring monthly payments rather than traditional ownership.

Powered by a financial partnership with Klarna, the service is available through both physical and digital Apple stores. While it replaces the legacy iPhone Upgrade Program for new customers, the scope is significantly broader, extending leasing options to Macs, iPads, and Apple Watches. Monthly lease prices start at $18 for iPhones, $12 for Apple Watches and iPads, and $25 for Macs. The leasing periods are structured by device type: iPhones and Apple Watches are available for 12 and 24 months, while Macs and iPads offer 24 and 36-month terms. Notably, the program requires iPhone users to maintain a cellular account with one of the three major US carriers: AT&T, T-Mobile, or Verizon. Unlike its predecessor, Apple Upgrade does not bundle AppleCare+ into the monthly cost, though users may add the protection plan separately.

The Shift to Hardware-as-a-Service

For over a decade, Apple utilized the iPhone Upgrade Program, which functioned primarily as a 0% APR loan for the full price of a handset with an option to upgrade after one year. However, as the cost of premium hardware has climbed and consumer behavior has shifted toward subscription-based consumption, Apple has transitioned to this true leasing model. By partnering with Klarna, Apple can offer a more flexible financial structure that accommodates a wider array of hardware beyond the smartphone.

Industry Implications

This transition reduces the financial barrier to entry for high-end hardware by lowering the immediate cost of acquisition. For Apple, the strategy increases customer lock-in across its entire ecosystem and establishes a predictable, recurring revenue stream. Furthermore, the leasing structure ensures a consistent and steady flow of used hardware back into Apple's trade-in pipeline, supporting its circular economy goals.

What to Watch

As the program rolls out across the US, the industry will be watching to see if Apple expands this Klarna-backed model to international markets. While the legacy iPhone Upgrade Program saw discontinuation in regions like the UK, it remains unconfirmed whether a similar "Apple Upgrade" leasing service will be deployed globally to replace those defunct regional programs.