Apple has officially launched Apple Upgrade, a new device leasing program that allows U.S. customers to lease iPhones, Apple Watches, iPads, and Macs with monthly payments starting at $17.99. The program is backed by buy-now-pay-later firm Klarna, which will handle all credit underwriting and risk. In parallel, Apple is discontinuing its own iPhone Upgrade Program and iPhone Payments offerings in the United States, marking a strategic exit from first-party consumer lending.
Under the new lease terms, customers can choose 12- or 24-month terms for iPhone and Apple Watch, and 24- or 36-month terms for iPad and Mac. At the end of the lease, they may return the device, make a lump-sum payment to own it, or roll into a new lease. The pricing emphasizes affordability: for example, an iPhone 17 Pro that costs $1,099 outright can be leased for $31.99/month over two years, resulting in about $768 in total payments with no ownership. The move comes as Apple faces rising product prices due to inflation, helping it retain price-sensitive consumers.
By handing credit risk to Klarna, Apple keeps customers within its ecosystem while removing loan loss exposure from its books. Klarna, which went public on the NYSE in September 2025 and has seen its stock struggle amid broader BNPL credit concerns, takes on the receivables and the risk of missed payments (leases terminate after three months of non-payment). The deal gives Klarna a massive volume of prime borrowers but also concentrates credit risk at a time when 47% of BNPL users have paid late in the past year, according to a LendingTree survey. The lease structure may also carry regulatory advantages, potentially avoiding some tightening BNPL oversight in the U.S. and EU.
