Apple has introduced a new way to own an iPhone, allowing customers to lease the device instead of purchasing it outright for the first time.
The Cupertino-based tech giant on Tuesday, July 28, announced that customers in the United States will be able to lease iPhones and other products for up to two years at prices starting at $17.99 per month. The new lease option has been rolled out as part of a new programme called Apple Upgrade in partnership with Klarna, a US-based platform that offers buy now, pay later loans.
The lease-to-own programme is currently only available in the United States. It will be offered at Apple’s physical retail stores in the country as well as its official online store. Besides iPhones, the company’s new lease-to-own programme also covers Apple Watch, Macs, and iPads.
However, some of Apple’s entry-level devices, such as the iPhone 16 and MacBook Neo, are not included in the programme.
The launch of Apple Upgrade in the US comes just days ahead of the company’s scheduled third-quarter earnings report. It will be CEO Tim Cook’s final earnings report before he transitions to executive chairman of the board, with John Ternus set to take over the reins from September 1. Shortly after announcing its Upgrade programme, Apple briefly hit a market capitalisation of $5 trillion for the first time, a day after passing Nvidia to become the most valuable publicly traded company.
Rolling out a leasing programme for its devices is a strategic move by Apple. Last month, the company, citing the global memory crunchraised the prices of its Mac computers and iPads by 15 per cent to 25 per cent across its key markets, including India.
Apple iPhone 17 Pro Max. (Express Photo)
Analysts expect that the newly launched leasing programme lets Apple shift the focus from a higher up-front sticker price to a lower monthly payment. Given that the company is also expected to hike iPhone prices this year, the new Apple Upgrade programme could also encourage customers to replace their devices sooner. Meanwhile, Apple is reportedly looking to expand its premium lineup, with its first-ever foldable smartphone expected to debut alongside the iPhone 18 Pro lineup in September 2026.
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“At Apple, we put the customer at the center of everything we do, and we’re thrilled that Apple Upgrade offers our customers, both online and in-store, a more flexible way to pay for the products they love,” Karen Rasmussen, Apple’s vice president of the Apple Store online, said in a press release.
How will Apple Upgrade work?
Apple said that it has teamed up with Klarna to create a simplified enrollment process that provides customers with detailed information regarding their leasing options before they enroll. Customers who wish to be part of Apple Upgrade will have to pass a soft credit check first. The application process can be done online or in-store within minutes, with quick approval from Klarna, according to Apple.
Once approved, customers will be offered a one- or two-year lease on an iPhone. No security deposit is required. If they want to lower their monthly lease payments, customers can do so by trading in their currently owned device through Apple Trade In. Lease payments made through Apple Card will earn customers three per cent cash back.
John Ternus, the company’s head of hardware engineering, will take over as CEO of Apple from September 1, 2026. (Jim Wilson/The New York Times)
Customers can view all of their lease information, including their billing schedule and remaining payments, on the Klarna app. They can also add an Apple Care subscription to protect their leased products. If payments are deferred, Klarna will not charge late fees. However, the lease agreement will be terminated after three months of missed payments.
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Once the one- or two-year lease period comes to an end, customers can either exit the Upgrade programme by returning the Apple device or choose to purchase it at that time with an additional payment. They can also choose to upgrade to a new device.
How much will you have to pay under Apple Upgrade?
Apple Upgrade offers one-year and two-year leasing options for iPhone and Apple Watch, and two-year- and three-year leasing options for Mac and iPad. The prices vary dramatically, with customers to pay more for premium devices.
Apple Watch Series 11. (Image: Nandagopal Rajan/The Indian Express)
Leasing prices start at $17.99 per month for iPhone, $11.99 for Apple Watch, $24.99 for Mac, and $11.99 for iPad. An unlocked iPhone 17 Pro will cost $31.99 a month for two years, or $45.99 for one year.
What does this mean for customers?
The Apple Upgrade leasing programme could be good news for prospective customers as the leasing options offered under the programme are much cheaper than what has been available so far.
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Apple already had a similar programme called iPhone Upgrade, where users paid more than $42 per month in 24 installments with financing from banking partners like Citizens Bank. However, Apple announced on Tuesday that its iPhone Upgrade programme is coming to an end in the US.
iPad Air powered by M4 chip. (Image credit: Apple)
Customers who are currently enrolled in the iPhone Upgrade programme will be transitioned to the newly launched Apple Upgrade.
Besides this, Apple also offers zero-interest financing for its products through a program called Apple Card Monthly Installments. Additionally, Apple Pay users can avail short-term loans from BNPL platforms such as Klarna and Affirm to purchase devices.
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