Apple will introduce a new device leasing program called "Apple Upgrade" next week, launching on Tuesday, July 28, in the United States. This new service will allow consumers to finance a wider range of Apple products, including iPhones, iPads, Macs, and Apple Watches, with payment terms extending up to 36 months for some devices. The program aims to offer lower monthly payments and will replace the existing iPhone Upgrade Program for new enrollments.[phonearena+2]
New Flexible Payment Options
The "Apple Upgrade" program operates similarly to a subscription or car lease model. Customers can choose a device and pay for it through monthly installments. For iPhones and Apple Watches, the lease terms will run for 24 months. iPads and Macs will feature longer 36-month payment plans, providing more flexibility for high-value purchases.[phonearena+2]
Users will have several options at the end of their lease term. They can return the device, pay off the remaining balance to own it outright, or choose to upgrade early to a newer model. Some of these actions, such as early upgrades or paying off the device, may involve additional fees. Subscribers can upgrade their iPhone to a new model after making 12 payments.[phonearena+2]
Partnership with Klarna and Credit Checks
Apple is partnering with Klarna Group Plc, a financial technology company known for its "buy now, pay later" services, to back the new program. This collaboration allows Apple to expand its financing options without directly shouldering all the credit risk. Prospective customers will undergo a soft credit check, which is a background review of their credit report that does not impact their credit score.[phonearena+2]
The introduction of Apple Upgrade marks a significant shift in Apple's sales strategy. The company plans to stop accepting new sign-ups for its current iPhone Upgrade Program and other standard financing options once the new service rolls out. This move positions Apple Upgrade as the primary financing pathway for many of its premium devices.[phonearena+2]
Key Differences from the Old Program
One notable difference from the previous iPhone Upgrade Program is the exclusion of AppleCare+ coverage in the base "Apple Upgrade" lease. The former program bundled AppleCare+ with Theft and Loss directly into the monthly payments. Under the new program, customers who want AppleCare+ will need to purchase it separately, which could increase their total monthly cost.[macrumors+2]
The former iPhone Upgrade Program, launched in 2015, allowed users to finance an unlocked iPhone directly from Apple with zero percent interest over 24 months. It also included AppleCare+ and the option to upgrade to a new iPhone after 12 payments. That program was designed to make premium iPhones more accessible and provided a clear path to annual upgrades.The new program broadens the scope beyond just iPhones, encompassing a wider array of Apple's product ecosystem.[apple+3]
Device Eligibility and Exclusions
While the "Apple Upgrade" program covers most iPhone, iPad, Mac, and Apple Watch models, some lower-priced devices will not be eligible. Excluded products reportedly include the Apple Watch SE, the entry-level iPad, the iPhone 16, and the MacBook Neo. Additionally, the program will not be available for business or education purchases. These exclusions suggest the program is primarily focused on making higher-end devices more attainable for individual consumers.[macworld+3]
Apple aims to market the new program as a way for consumers to make lower monthly payments compared to current financing plans. This strategy comes amid expectations of rising iPhone prices later this year, driven by factors like memory chip shortages due to strong demand from AI data centers. The company hopes to keep its latest gadgets accessible to budget-conscious shoppers.[phonearena+1]
What This Means for Consumers
For consumers, the "Apple Upgrade" program offers increased flexibility in acquiring Apple's latest technology. The longer payment terms for Macs and iPads could make these devices more affordable on a monthly basis. The option to upgrade after 12 payments for iPhones and Apple Watches also allows users to stay current with new models. However, consumers should carefully consider the absence of included AppleCare+ and any potential additional fees for early upgrades or device payoffs.[phonearena+2]
This new leasing model represents a significant evolution in how Apple sells its hardware. By partnering with Klarna and offering more flexible, subscription-style payments across a broader product line, Apple is adapting to market demands for more affordable access to premium technology. The program could encourage more frequent upgrades and wider adoption of multiple Apple devices.
