Apple is preparing to launch a new device leasing program called “Apple Upgrade” in the U.S. on Tuesday, July 28, according to Bloomberg, which cited people familiar with the matter. Instead of buying an iPhone, Mac, iPad, or Apple Watch outright, customers would pay a monthly fee to use the device, with financing handled by the Swedish buy-now-pay-later company Klarna — the same category of company as Affirm. Bloomberg has reportedly framed it as one of the largest shifts in Apple’s sales strategy in years.
How Apple Upgrade would work
The program is expected to function much like a car lease rather than a traditional purchase. A customer would choose a device — either online or at an Apple Store — and pass a soft credit check handled by Klarna. From there, a fixed monthly payment covers the cost of using the device for the length of the lease term.
When the term is up, customers would reportedly have three choices: move up to a newer model, pay the remaining value of the device to keep it, or hand it back. Some of those choices may carry extra fees, and anyone who wants to own the device sooner would be able to pay off the remaining balance early.
Lease terms: 24 months for iPhones, 36 for Macs and iPads
Reported lease lengths vary by product:
- iPhone and Apple Watch: 24-month terms
- Mac and iPad: 36-month terms
Which purchases won’t qualify
Apple Upgrade isn’t expected to cover Apple’s entire lineup. Budget and entry-level devices are reportedly excluded, including the iPhone 16, the base iPad, the Apple Watch SE, and the MacBook Neo. It’s also unclear whether newer lower-cost models, such as the iPhone 17e, will be eligible. Business and education purchases are reportedly excluded entirely, with the program limited to individual consumers.
Apple Upgrade is also expected to leave out AppleCare by default — a change from the current iPhone Upgrade Program, which has bundled AppleCare+ into its monthly payments since launching in 2015. Anyone who wants coverage under the new plan would reportedly need to buy it separately.
A replacement, not an add-on
Apple Upgrade isn’t expected to run alongside Apple’s current financing. Per the report, Apple plans to stop taking new sign-ups for the iPhone Upgrade Program and its standard installment plans once the new leasing option arrives.
Why leasing, and why now
The timing tracks with a rough year for Apple’s pricing. Surging memory and storage chip costs — driven in part by AI companies’ data-center buildouts competing for the same components — have already pushed up prices on several Mac and iPad models, and another increase is widely expected once this fall’s new iPhone lineup arrives. Leasing lets Apple advertise a smaller monthly number even as sticker prices climb, while adding a new stream of recurring revenue alongside its services business.
Where Klarna fits in
Klarna has worked with Apple before: it’s been available as a “buy now, pay later” option inside Apple Pay and the Wallet app since a rollout in late 2025, after Apple shut down its own in-house Apple Pay Later service in 2024. Backing Apple Upgrade would extend that relationship — Klarna, rather than Apple, would carry the credit risk of the leases on its own books. Apple had reportedly looked into building a similar leasing service internally before shelving those plans in 2024 over concerns about financial oversight.
What’s still unconfirmed
Neither Apple nor Klarna has commented publicly, so the July 28 date and the details above could shift before anything is made official. It’s also unclear how soon Apple Upgrade might expand beyond the U.S.; at launch, it’s expected to be available only through Apple’s U.S. stores and website.
If the program does arrive as described, it’s worth remembering that lease and buy-now-pay-later-style financing can carry steep fees for missed or late payments — so anyone considering it once it’s live should read the terms closely.
FAQ
When is Apple Upgrade launching? Bloomberg reports a launch date of Tuesday, July 28, initially limited to the U.S.
How is this different from the iPhone Upgrade Program? Apple Upgrade reportedly spans more product categories — iPhone, Mac, iPad, and Apple Watch — is backed by Klarna instead of Apple’s own financing, and is expected to replace the iPhone Upgrade Program rather than run alongside it.
Does Apple Upgrade include AppleCare? Not by default, according to the report. It would reportedly need to be added separately.
Which devices are excluded? The iPhone 16, entry-level iPad, Apple Watch SE, and MacBook Neo are reportedly not eligible, and business or education purchases won’t qualify.
This article is based on Bloomberg’s reporting and has not been confirmed by Apple or Klarna. Details may change before the program’s official announcement.
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