Apple Upgrade launches: Leasing instead of buying – initially only in the USA

Apple has ended its ten-year-old iPhone Upgrade Program and replaced it with a leasing model that, for the first time, also includes Macs, iPads, and Apple Watches. It's handled by Klarna, with monthly payments starting at $17.99. Even those who pay the full term upfront don't own the device at the end.

Apple Upgrade has been available online, in the Apple Store app, and in US stores since July 28. This date falls precisely within the expected timeframe for the launch of the leasing program. More than just the name is new: instead of an installment purchase followed by ownership, a lease agreement is established with Klarna Inc., at the end of which the device is returned - unless a separate purchase fee is charged. The program covers four product lines and replaces two previous payment methods in the US at once.

Four product lines, two runtimes per device

iPhones and Apple Watches are available on 12- or 24-month contracts, while Macs and iPads are available on 24- or 36-month contracts. Apple lists starting monthly payments of $17.99 for an iPhone, $11.99 for an Apple Watch, $24.99 for a Mac, and $11.99 for an iPad, all excluding taxes. Trading in an Apple device through Apple Trade In reduces the monthly payment immediately upon signing up, and payments made with the Apple Card earn you three percent Daily Cash back.

Klarna handles the credit check and conducts it as a soft inquiry that leaves the credit score unaffected. Apple does not require a security deposit. However, a leased iPhone requires a contract with AT&T, T-Mobile, or Verizon; prepaid plans are not permitted. The device itself remains unlocked, and switching providers during the lease term is possible.

Three ways out of the contract – and the fine print

At the end of the lease term, there are three options: upgrading to the latest model via a new lease agreement, purchasing the existing device with a one-time payment, or returning it and ending the lease. Managing the payment plan and remaining lease term is done via the Klarna app.

The contract terms contain several points not mentioned in the announcement. Early termination can incur significant fees. If no action is taken at the end of the initial term, the contract automatically renews for up to six months, during which the monthly fee may increase. If no action is taken even after this period, the purchase price will be charged. Insurance is not included; additional costs may apply in the event of loss, theft, or damage to the returned device. AppleCare can be added separately – in contrast, AppleCare+ was an integral part of the monthly fee in the iPhone Upgrade Program.

What the total of the installments amounts to

Apple provides four specific calculation examples in the terms and conditions. Taken together, a consistent pattern emerges:

Device	Purchase price	Duration	Monthly payment	Total installments
iPhone 17 Pro, 256 GB	1.099 $	12 months	45,99 $	551,88 $
iPhone 17 Pro, 256 GB	1.099 $	24 months	31,99 $	767,76 $
Apple Watch Series 11, 42 mm	399 $	12 months	21,99 $	263,88 $
Apple Watch Series 11, 42 mm	399 $	24 months	11,99 $	287,76 $
iPad Pro 11″, 256 GB	1.199 $	24 months	31,99 $	767,76 $
iPad Pro 11″, 256 GB	1.199 $	36 months	24,99 $	899,64 $
MacBook Pro 14″, 16 GB	1.999 $	24 months	53,99 $	1.295,76 $
MacBook Pro 14″, 16 GB	1.999 $	36 months	38,99 $	1.403,64 $

In all four cases, the total monthly payment ranges between 64 and 75 percent of the purchase price, without the device becoming the buyer's property. It's also worth noting that the longer payment term ultimately costs more than the shorter one: For the iPhone 17 Pro, the two options differ by $215.88, while for the 14-inch MacBook Pro, the difference is $107.88. The lower monthly payment thus results in a higher total cost.

These devices are excluded

Not every product is available for leasing. Exceptions include the iPhone 16 and iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, iPad (A16), and the Studio Display. The list consists entirely of the most affordable models in their respective categories. The MacBook Neo, whose successor is expected in the coming months, is also excluded.

A program from 2015 disappears

With the launch of Apple Upgrade, Apple is discontinuing the iPhone Upgrade Program and iPhone Payments in the US. Introduced in 2015 alongside the iPhone 6s, this model bundled annual device upgrades and AppleCare+ into a single monthly payment and was limited to the US, UK, and China for its entire duration. Existing enrolled members can switch to Apple Upgrade if eligible, finance through Apple Card Monthly Installments, purchase the device outright, or opt for financing through their mobile carrier.

Installment buying instead of leasing: the situation in Germany

Apple Upgrade requires a US residence, and delivery and pickup are limited to US addresses and US stores. Among other requirements, a Social Security Number or ITIN and a Klarna account are needed. Germany, Austria, and Switzerland are therefore excluded; Apple has not given a reason for this restriction. The previous program was never available in these three markets either.

In the German Apple Store, installment payments are instead processed through Openbank Pay, the trading name of Open Bank SA – a subsidiary of Banco Santander, headquartered in Madrid. For the iPhone 17, iPhone Air, iPhone 17 Pro, and iPhone 17 Pro Max, the effective annual interest rate is zero percent for both 12 and 24 installments. Macs and iPads also incur no additional charges for 12 installments, 2.5 percent for 24 installments, and 3.5 percent for 36 installments; certified refurbished devices have a flat rate of 6.09 percent. Apple's own example calculation: €949 over 24 installments results in 23 monthly installments of €39.54 and a final payment of €39.58 – totaling exactly €949.

The crucial difference lies in the outcome: after the final payment, the device is yours. However, a trade-in option still exists: with current iPhone models on a 24-month payment plan, the device can be traded in within a qualifying period, thus concluding the current installment purchase without the remaining payments. AppleCare+ is included with the installment purchase at zero percent APR, and AppleCare One will also be available in Germany starting August 4th. The three percent Daily Cash bonus announced in the US, however, is completely omitted because the Apple Card is still not offered in Germany.

From purchase to right of use

In its home market, Apple is thus shifting the norm: away from buying with installments, towards a monthly payment that continues without culminating in ownership. For Apple, this means predictable recurring revenue and a shorter replacement cycle; for buyers, a lower barrier to entry, albeit with less control over the device. The fact that the technical foundation for this is already being laid became apparent a week ago in the code of iOS 27, where a locking mechanism for leased iPhones appeared. In Europe, this model encounters an established structure of installment purchases and zero-percent financing – for now, the two markets are moving in different directions. (Image: Apple)