Apple is reportedly launching a device leasing program called Apple Upgrade on July 28 with Klarna as the financial backer, marking one of the biggest changes the company has ever made to how it markets and sells devices, according to Bloomberg.
The leases will run 24 months on iPhones and Apple Watches and 36 months on Macs and iPads, cover most higher-end models, and require a soft credit check. Customers will be able to pay off early, trade up, keep the device, or hand it back, some of which carry an extra fee. Notably, the new financing plans exclude AppleCare, unlike its current iPhone Upgrade Program, so customers will have to buy that separately.
The new program arrives weeks after Apple raised prices by hundreds of dollars across its laptops, tablets, and other devices in response to an industrywide memory shortage. The company also plans to increase iPhone prices when new models are unveiled later this year. How much are iPhones now? Like $3,000?
Apple plans to stop new enrollments in its current iPhone Upgrade Program and no longer offer in-house financing once Upgrade goes live, which are smart moves all around. This is the third time Apple has backed away from lending, after spending two years building its own hardware subscription service before scrapping it in late 2024 over software and regulatory problems, and before that, launching and killing Apple Pay Later within a year and a half.
I've never quite understood why Apple would want to be in the business of financing and collections, as it's not a good look for the brand. People want to use and enjoy their iPhone every day, not think about how they're still paying for it. Let Klarna and their AI CEO avatar deal with the ugly side of affording things.
