Apple Expands Recurring Hardware With New Device Leases
Aug 03, 2026Apple Upgrade expands Klarna-powered leasing beyond the iPhone to eligible Macs, iPads and Apple Watches, building the next device decision into the original transaction.
Apple is extending recurring payments and planned upgrade decisions across four major parts of its hardware business.
The company launched Apple Upgrade in the United States on July 28. Eligible customers can now lease an iPhone, Apple Watch, iPad or Mac through Klarna. Apple also stopped offering the iPhone Upgrade Program and iPhone Payments in the United States, replacing two iPhone-focused offers with one leasing program across four product categories.
Apple says the goal is to give customers more payment flexibility. Karen Rasmussen, Apple’s vice president of the Apple Store online, called Apple Upgrade “a more flexible way to pay for the products they love.”
The program also builds a return, upgrade or purchase decision into the original transaction. The lease creates a scheduled decision point across four device categories, extending a model Apple previously offered only for iPhone.
One Leasing Program Across Four Device Categories
Apple Upgrade offers 12- or 24-month leases for eligible iPhones and Apple Watches, and 24- or 36-month leases for eligible iPads and Macs.
Monthly prices start at $17.99 for an iPhone, $11.99 for an Apple Watch, $11.99 for an iPad and $24.99 for a Mac. Customers can apply through Apple’s U.S. online store, the Apple Store app or a U.S. Apple Store. Klarna conducts a soft credit inquiry, provides the lease and collects the monthly payments.
The program includes many current iPhone, Mac, iPad and Apple Watch models, although not every device is eligible. An iPhone lease requires the customer to connect the device to AT&T, T-Mobile or Verizon at enrollment. Prepaid plans are not eligible. Customers who want to lease more than one product must apply separately for each one.
A trade-in can lower the payments on a customer’s initial lease. AppleCare is not included. Customers can purchase AppleCare separately from Apple or add an eligible leased device to an AppleCare One subscription.
Apple describes the offer as a consumer lease rather than a purchase or loan. Customers do not own the device at the end of the lease unless they pay the purchase-option fee.
The Next Device Decision Is Already Scheduled
At the end of the initial term, a customer can:
- Return the device and leave the program.
- Return it and apply for a new lease on another eligible device.
- Pay the purchase-option fee and keep it.
Apple says it will notify customers when they are eligible to upgrade and explain how to return the current device. To upgrade, the customer must apply for a new lease, pass another eligibility and credit review, and return the existing device in good working condition.
Customers who upgrade before the scheduled end of the initial term may also owe an early-upgrade payment. Depending on when they upgrade, that amount can be as high as the remaining lease payments through the end of the term.
That process gives Apple a reason to reconnect with the customer at a predictable point. It also brings the used device back under Apple’s control while putting a new product decision in front of the customer.
Apple remains the customer-facing storefront and handles services including product setup and device returns. Klarna manages the lease and payment relationship. Klarna told investors that the partnership creates direct relationships with new U.S. consumers and is expected to contribute positively to its adjusted operating income in 2026 and over the life of the arrangement.
The Monthly Payment Comes With Exit Obligations
Apple’s marketing emphasizes low payments, easy upgrades and flexibility. The lease terms make the exit and end-of-term details especially important.
Customers have 14 days after receiving a device to return it and cancel the lease. After that, Apple says early termination requires a fee equal to the unpaid monthly lease payments, including applicable taxes and fees, through the end of the initial term. The device still must be returned.
Customers who reach the scheduled end of the term can return the device without an additional termination fee, provided it meets the required condition. If they do nothing, the lease moves to a month-to-month extension for up to six months. Customers who received a trade-in credit will see their monthly payment increase during the extension because that credit applies only to the initial term. If the customer still takes no action, Klarna charges the purchase-option fee and the customer buys the device.
Damage, loss or theft can create additional costs. A customer may owe a damage fee if a returned device is not in the required condition. If an eligible device is lost or stolen without AppleCare+ Theft and Loss coverage, the customer must pay the purchase-option fee.
Insider Take
The scheduled customer decision is the real business value of Apple Upgrade. Apple can reconnect with the customer at a known point, when the choices are to keep, return or replace the device. That turns an uncertain future purchase into a planned recurring moment.
The work behind that moment is divided carefully. Apple keeps control of the product experience and the next-device conversation. Klarna provides the lease, manages payments, carries the financing receivable and gains a direct relationship with the customer.
The same design creates a customer-trust test. A timely upgrade notice can make replacing a device easier. An early termination bill, a higher payment after a trade-in credit ends or an eventual purchase charge may come as a surprise if the customer did not understand the terms when signing up.
Subscription operators do not need to copy the lease. The useful question is whether the next customer decision has been designed as carefully as the first sale, and whether the choices to continue, change or leave are equally clear.
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