Apple Launches 'Upgrade' Leasing Program via Klarna to Offset Recent Price Hikes

Key points

• Apple launched the 'Apple Upgrade' leasing program on July 28, 2026, in the United States, replacing the previous iPhone Upgrade Program.
• The program is powered by Klarna, which acts as the financial partner and legal owner of the leased devices during the contract term.
• Lease terms range from 12 to 24 months for iPhones and Apple Watches, and 24 to 36 months for Macs and iPads.
• Monthly payments start at $17.99 for an iPhone, with no security deposit, interest, or additional fees required.
• At the end of the lease, customers can return the device, upgrade to a new model, or pay a buyout price calculated as the original list price minus payments already made.
• The program excludes entry-level devices such as the iPhone 16, base iPad, and Apple Watch SE, focusing instead on premium hardware.

Background

This launch follows a series of price increases for Apple products in June 2026, driven by a global memory chip shortage. Earlier reports indicated that Apple raised prices for Macs and iPads by at least $100, with some models increasing by over $1,000. Analysts had predicted similar hikes for the upcoming iPhone 18 lineup, with estimates suggesting the cost of components could add up to $300 to the bill of materials. The new leasing program is designed to mitigate the impact of these rising costs on consumers by shifting the focus from high upfront sticker prices to manageable monthly payments.

How outlets are covering it

9to5Mac emphasizes the financial protection offered by the buyout clause, noting that customers will never pay more than the original list price if they choose to own the device after the lease. In contrast, Yahoo Finance highlights the strategic benefits for Klarna, suggesting the fintech company may be the biggest winner by securing merchant fees and the ability to refurbish and resell returned devices. CNBC points out that the program positions Apple to compete more directly with carrier financing plans, while IDC analysts note that the lower monthly costs could encourage more frequent device upgrades, potentially shortening the average replacement cycle from nearly four years. CNN frames the move as a response to rising electronics prices and a strategy to make premium devices feel more accessible as subscription-like services.

Why it matters

The introduction of Apple Upgrade signals a significant shift in how Apple monetizes its hardware, moving away from one-time purchases toward recurring revenue streams. By partnering with Klarna, Apple can potentially smooth out seasonal sales volatility and reduce reliance on hit device cycles. For consumers, the program offers a lower barrier to entry for premium devices, though it may encourage a culture of frequent upgrades. For the broader market, the deal represents a major expansion for Klarna, providing it with a high-volume, long-tailed revenue source tied to Apple's massive device sales.

What to watch

Apple is scheduled to report its third-quarter earnings on July 30, 2026, which will be CEO Tim Cook's final report before he transitions to executive chairman. The leasing program is expected to gain traction ahead of the anticipated September launch of the iPhone 18 lineup, which may include a foldable model priced around $2,500. As leases mature, the secondary market for refurbished Apple devices may see increased activity, and Klarna's financial performance will likely reflect the volume of these new contracts.