Apple Leasing Program to Replace iPhone Upgrade

When Apple launches its leasing offering, Apple Upgrade, on Tuesday (July 28), the company will wind down its iPhone Upgrade Program, Bloomberg reported Sunday (July 26).

Apple will stop accepting new enrollments to the iPhone Upgrade Program but will allow those who are already in the program to continue it “for the time being,” the report said.

Compared to the iPhone Upgrade Program, Apple Upgrade will not include AppleCare; will be a leasing program rather than a financing program; and will be backed by Klarna rather than Citizens Bank, according to the report.

It was reported July 21 that the soon-to-be-launched leasing program will be one of the largest-ever changes to how Apple sells its products.

The program will support most iPhone, Mac, iPad and Apple Watch models, and Klarna will serve as Apple Upgrade’s financial backer, according to the report.

The report said Apple Upgrade will work like a subscription. Users will be able to pay off devices early in their term, upgrade earlier to newer models, or keep the original device until the leasing period ends. As with a car lease, the device could be returned when the term is up.

Apple aims to promote the program as a way to have lower payments than what current financing programs offer. While the company did not include the iPhone in a recent round of price increases, it is widely expected to raise the cost of the device when the latest model debuts in September, per the report.

Digitaltrends reported Sunday that the new Apple Upgrade program will launch first in the United States and will offer 24-month leases on eligible iPhones and Apple Watches and 36-month leases on Macs and iPads.

It was reported in December 2024 that Apple stopped its development of an iPhone hardware subscription program after running into software bugs and concerns about potential regulatory scrutiny.

Earlier in 2024, Apple shut down its buy now, pay later (BNPL) offering because of stricter regulations announced by the Consumer Financial Protection Bureau. The company began promoting third-party BNPL programs offered by Affirm and Klarna instead.