The news
Apple (AAPL) launched Apple Upgrade leasing in the United States on July 28, 2026, offering iPhone, Apple Watch, Mac and iPad on monthly leases provided by Klarna (KLAR), with iPhone leases starting at $17.99 a month. It replaces Apple's iPhone Upgrade Program.
Apple said iPhone and Apple Watch come with 12- or 24-month terms, and Mac and iPad with 24- or 36-month terms. Starting prices are $11.99 a month for Apple Watch, $24.99 for Mac and $11.99 for iPad. In Apple's own example, a $1,099 iPhone 17 Pro with 256GB costs a typical $31.99 a month over 24 months or $45.99 over 12 months, before taxes and trade-in credit. Customers can trade in a device to cut payments and earn 3% Daily Cash back when paying with Apple Card.
Customers apply online or in Apple stores, and Klarna makes the approval decision after a soft credit inquiry that Apple said will not affect their credit score. At the end of the term they can upgrade under a new lease, buy the device with a one-time payment, or return it. Under Apple's terms, a lease that is not closed converts to month-to-month for up to six months before the purchase fee is charged; ending a lease early may bring substantial fees, and insurance is not included. iPhone leases require a postpaid plan from AT&T, T-Mobile or Verizon, though the phone is unlocked.
Apple said it will no longer offer the iPhone Upgrade Program or iPhone Payments in the US. CNBC reported that the old program, which bundled AppleCare, cost more than $42 a month over 24 installments and was financed by Citizens Bank. Current members can keep paying until their phones are paid off, MacRumors reported. Karen Rasmussen, Apple's vice president of the Apple Store online, said the program gives customers "a more flexible way to pay for the products they love."
In a note to investors filed with the Securities and Exchange Commission (SEC) the same day, Klarna said it expects the program to contribute positively to its adjusted operating income in 2026 and over the life of the arrangement. Klarna said it finances the purchase, earns a financing return on scheduled payments, carries the receivable at fair value and may sell it into future offloading programs.
The numbers
- iPhone lease, starting price
- $17.99 a month
- Mac lease, starting price
- $24.99 a month
- Apple Watch and iPad leases, starting price
- $11.99 a month
- iPhone 17 Pro 256GB ($1,099), typical payment
- $31.99 a month over 24 months; $45.99 over 12
- Lease terms offered
- 12, 24 or 36 months, by device
- Apple Card Daily Cash on lease payments
- 3%
Why CEOs should care
Business buyers should read the eligibility rules first. Apple's terms describe Apple Upgrade as a consumer lease and exclude purchases through Apple at Work for small businesses or enterprises, corporate employee purchase programs, and government and education programs. It is not a route for fleet procurement, so companies that want to lease Macs or iPhones still need a business leasing or financing channel. The consumer terms do set a public benchmark: Klarna charges no leasing fee, MacRumors reported, so a customer who leases and then buys a device pays its retail price before taxes.
For security and IT teams, the program is likely to put more personal devices used for work under bring-your-own-device (BYOD) policies on a fixed return cycle. Returned devices go back in prepaid boxes and Klarna assesses them for damage, MacRumors reported. BYOD rules should require that work accounts and device-management profiles are removed, and the device wiped, before any return, and help desks should plan for more swaps around each iPhone release.
For fintech and bank leaders, a marquee merchant has switched both structure and partner: from an installment plan that CNBC said Citizens Bank financed to a lease run by a buy now, pay later provider. Klarna told investors customers will pay and manage leases in its app, giving it a direct relationship with new US consumers. Boards at hardware and subscription companies should ask whether a lease partner could lower the upfront price customers see as component costs rise, and who would carry the credit and device-value risk.
The bigger picture
Apple already let customers pay over time through Apple Card Monthly Installments, a 0% APR option, and through Klarna and Affirm loans in Apple Pay, CNBC noted. Klarna described Apple Upgrade as building on its existing relationship with Apple and as part of its fair financing strategy.
The timing followed higher prices. CNBC reported that a month earlier Apple, citing the global memory crunch, raised starting iPad and Mac prices by at least $100, and that analysts expected iPhone price increases; leasing shifts buyers' attention to a lower monthly payment. The outlet also cited Bernstein estimates that the average iPhone replacement cycle has stretched to nearly four years, and said the program could encourage customers to replace devices sooner.
What happened next
On August 18, 2026, Klarna reported second-quarter revenue of $1.042 billion, up 27% from a year earlier, and listed the Apple Upgrade launch among its developments. On September 9, Apple introduced the iPhone 18 Pro at a starting price of $1,199. Apple's online store lists a typical Apple Upgrade payment of $34.99 a month over 24 months, or $49.99 over 12 months, for the 256GB model before taxes and trade-in credit, compared with $31.99 and $45.99 for the $1,099 iPhone 17 Pro in the July example.
What to watch: whether Klarna discloses lease volumes or credit performance in its third-quarter results, whether Apple opens the program to business customers or other countries, and how many former iPhone Upgrade Program members move to leases as their current phones are paid off.
