Apple Teams With Klarna on Apple Upgrade Leasing｜Replaces the iPhone Upgrade Program It Ran Itself for Years
TL;DR
Apple debuts Apple Upgrade device leasing on July 28 with Klarna financing — replaces its own iPhone Upgrade Program and killed hardware subscription.
Apple will launch Apple Upgrade on July 28 — a device leasing program covering most iPhone, Mac, iPad, and Apple Watch models, with Swedish fintech Klarna providing the financing. Launch market: US Apple Stores and online.
Two lease terms — iPhone / Apple Watch 24 months, Mac / iPad 36 months. At term end users can keep the device, upgrade early, or pay it off. AppleCare is not bundled. Some low-end SKUs excluded.
The program replaces the existing iPhone Upgrade Program and standard installment plans. Apple built its own hardware subscription service in 2024 but killed it internally the same year — this time outsourcing the financing layer to Klarna and keeping only the device and channel.
The real math is on sales. iPhone replacement cycles in Greater China, India, and North America are stretching under pressure from Xiaomi and Samsung. Leasing splits a single $1,000 buying decision into a $40 monthly commitment, lowering the psychological hurdle. Every 24-month cycle auto-triggers the next sale — something hardware makers have wanted for two decades without executing.
What Klarna gets — near-zero funding cost, because Apple is an extremely high-grade collateral source (the device itself). Klarna's role is more service-tier credit management and collections. This is Klarna's biggest B2B deal ahead of its IPO.
One small detail — Apple Upgrade is not tied to Apple Card. Picking Klarna over Apple's own financial products is consistent with Apple's shift after Goldman Sachs exited the Apple Card partnership in 2024: outsource the financing, keep the hardware margin.
via Bloomberg
Two lease terms — iPhone / Apple Watch 24 months, Mac / iPad 36 months. At term end users can keep the device, upgrade early, or pay it off. AppleCare is not bundled. Some low-end SKUs excluded.
The program replaces the existing iPhone Upgrade Program and standard installment plans. Apple built its own hardware subscription service in 2024 but killed it internally the same year — this time outsourcing the financing layer to Klarna and keeping only the device and channel.
The real math is on sales. iPhone replacement cycles in Greater China, India, and North America are stretching under pressure from Xiaomi and Samsung. Leasing splits a single $1,000 buying decision into a $40 monthly commitment, lowering the psychological hurdle. Every 24-month cycle auto-triggers the next sale — something hardware makers have wanted for two decades without executing.
What Klarna gets — near-zero funding cost, because Apple is an extremely high-grade collateral source (the device itself). Klarna's role is more service-tier credit management and collections. This is Klarna's biggest B2B deal ahead of its IPO.
One small detail — Apple Upgrade is not tied to Apple Card. Picking Klarna over Apple's own financial products is consistent with Apple's shift after Goldman Sachs exited the Apple Card partnership in 2024: outsource the financing, keep the hardware margin.
via Bloomberg
