Apple is reportedly teaming up with deferred-payment company Klarna on a new lease-to-own program. The program, called Apple Upgrade, gives customers another way to get their hands on iPhones, Macs, iPads, and Apple Watches without paying the full price upfront.
Apple wants you to rent your next iPhone like a car lease
According to Bloomberg, the program is expected to launch on July 28. And yes, you can apparently keep the device at the end. Or return it. Or upgrade to something newer.
The basic idea is pretty straightforward. Instead of buying your shiny new Apple gadget outright, you make payments over a longer period. The reported lease terms vary depending on the specific device. Leases for iPhones and Apple Watches will be up to 24 months. On the other hand, Macs and iPads will go on lease for up to 36 months.
Once the lease ends, customers reportedly have the option to keep the device, return it, or upgrade to a newer model. There is one little asterisk, though. Bloomberg says some transactions may come with an additional fee.
Apple already had an upgrade program
This is not Apple’s first rodeo with device financing. The company already offers an iPhone Upgrade program, which lets customers pay for an iPhone over time and upgrade to a new one. But Apple reportedly plans to stop accepting new customers into that program and roll its offerings into the Apple Upgrade service instead.
That makes sense if Apple wants to turn upgrading from an iPhone-specific thing into a full ecosystem strategy. Because once you’re leasing the iPhone, why not lease the MacBook sitting next to it? And the Apple Watch.
There is a strategic point for Apple in this
The timing is particularly interesting because hardware is not getting any cheaper. The tech industry is dealing with a massive memory-chip shortage, partly because the AI boom is consuming enormous amounts of memory for data centers and AI infrastructure. In other words, AI is hungry, and regular consumer electronics are feeling the effects.
Apple has already announced price increases, so a program that lets customers spread those costs over multiple years could make those higher prices feel less painful.
Read the fine print before you get too excited
Lease-to-own programs can be convenient, but “affordable monthly payment” doesn’t automatically mean “cheaper.” The total cost can depend on the length of the agreement, fees, and what happens if you return or upgrade the device.
So if Apple Upgrade launches as reported, consumers should calculate the total cost before signing up. While the monthly number is designed to make your wallet feel better, the total number is what tells you what you are actually spending.
Sources: TechCrunch, Bloomberg