Apple to launch 'Apple Upgrade' leasing service for iPhones, Macs and iPads

Apple is reportedly preparing one of its biggest changes to hardware sales in years—not by unveiling a new iPhone, but by changing how customers pay for one.

According to Bloomberg News, Apple will launch a subscription-style device leasing programme called Apple Upgrade in the United States on July 28. The service will allow customers to lease most iPhones, Macs, iPads and Apple Watches for a monthly fee, with the option to upgrade early, pay off the device or keep it when the lease ends. Swedish fintech company Klarna will finance the programme.

If introduced as reported, the programme would replace Apple's existing iPhone Upgrade Program and standard financing for new customers. This denotes a shift from ownership-focused financing to a model that more closely resembles vehicle leasing.

The decision arrives as Apple faces a more complicated hardware market. The company recently raised prices on several products, including iPads and MacBooks, as higher memory and storage chip costs driven by AI infrastructure investments flow through the electronics industry. The iPhone has largely escaped those increases so far, but analysts are watching how Apple maintains demand while preserving its high-end pricing.

Unlike the existing iPhone Upgrade Program, Apple Upgrade is expected to cover a wider range of products.

Bloomberg reported that eligible devices will include most iPhone, Mac, iPad and Apple Watch models. However, entry-level products—including the Apple Watch SE, base-model iPad, iPhone 16 and MacBook Neo—are expected to be excluded, along with purchases made through business and education channels. AppleCare will also no longer be bundled into the programme.

Lease periods are expected to vary by device, with iPhones and Apple Watches running for 24 months, while Macs and iPads would typically have 36-month terms. Customers would reportedly undergo a soft credit check before approval.

The reported launch is notable because Apple previously explored a dedicated hardware subscription service letting customers pay a recurring monthly fee for access to new iPhones. Bloomberg first reported that initiative in 2022, but it was later shelved after delays related to software development and regulatory issues, according to The Verge.

Instead of financing the programme itself, Apple is partnering with Klarna, shifting the credit risk to the buy-now-pay-later company while allowing Apple to focus on hardware and services.

For Apple, the programme could help encourage more frequent upgrades at a time when consumers are keeping smartphones and laptops for longer.

Research firms including IDC and Counterpoint Research have noted that upgrade cycles for premium smartphones have lengthened as annual hardware improvements become more incremental. A lower monthly payment could make flagship devices easier to upgrade more often without requiring customers to purchase them outright.

Apple has not publicly confirmed the programme, and neither the company nor Klarna immediately responded to Reuters' requests for comment.