Apple Is Replacing Its iPhone Upgrade Program. Customers Can Now Lease Devices Through Klarna

Apple is overhauling the way Americans pay for its devices, unveiling a new leasing program that allows customers to get an iPhone for as little as $17.99 per month through a partnership with Swedish financial technology company Klarna.

The program, called Apple Upgrade, is launching in the United States and expands beyond smartphones to include iPads, Macs and Apple Watches. It replaces Apple's long-running iPhone Upgrade Program and marks a broader shift toward subscription-style access to hardware rather than outright ownership.

Under the new offering, eligible customers can lease most Apple devices through monthly payments after completing a soft credit check handled by Klarna, a process that does not affect credit scores. Applications can be completed online, through the Apple Store app or at Apple retail stores.

Monthly pricing begins at $17.99 for an iPhone, $11.99 for an Apple Watch or iPad, and $24.99 for a Mac. Lease terms vary depending on the product. iPhones and Apple Watches are available with 12- or 24-month agreements, while Macs and iPads can be leased over 24 or 36 months.

At the end of the lease, customers can return the device and walk away, purchase it outright with a final payment, or trade it in and begin a new lease on the latest model. Apple said customers can also lower their monthly payments by using the Apple Trade In program, while those paying with an Apple Card will continue to receive 3% Daily Cash rewards.

Apple executives described the program as a way to provide greater payment flexibility as device prices continue climbing. "At Apple, we put the customer at the center of everything we do," Karen Rasmussen, Apple's vice president of Apple Store Online, said in a statement announcing the service. "We're thrilled that Apple Upgrade offers customers a more flexible way to pay for the products they love."

The launch comes as Apple faces mounting cost pressures across its hardware lineup. The company recently raised prices on several Mac and iPad models, citing higher memory and storage costs driven by global supply constraints.

Unlike the previous iPhone Upgrade Program, Apple Upgrade is designed as a true lease rather than an installment financing plan. Customers do not automatically own the device after completing their monthly payments. To keep it permanently, they must pay the remaining purchase amount at the end of the lease. Those who simply return the device can upgrade to a newer model without having to sell or trade it independently.

The transition also gives Apple more control over returned hardware, allowing the company to funnel leased devices into its refurbished sales channels or recycling programs. Industry analysts say that approach mirrors the automobile leasing model, where manufacturers maintain a steady pipeline of pre-owned inventory while encouraging customers to upgrade more frequently.

Current participants in Apple's existing iPhone Upgrade Program will be able to finish paying off their current devices. However, future upgrades will require customers to move to Apple Upgrade, finance purchases through Apple Card Monthly Installments where available, buy devices outright or use eligible carrier financing.