Apple Sales Model Revolution: Teams Up with Klarna to Launch Device Leasing Program, Lowers Purchase Barriers to Boost Sales

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Apple is preparing to launch a device leasing plan called Apple Upgrade, which will become one of the company’s biggest adjustments to its device sales model in history.

According to Bloomberg, citing people familiar with the matter, this new service is planned to go live on July 28 and will support most iPhone, Mac, iPad, and Apple Watch models. Apple will cooperate with Swedish fintech company Klarna Group, which will provide financial support.

In the initial phase, the plan will be launched in the U.S. market at least, covering both Apple’s offline retail stores and online store. After the news was announced, Klarna’s stock rose as much as 11%, but the gains could not be sustained, ending up only 1.44% higher; Apple’s stock was basically flat, closing up 0.35% on Tuesday.

Operating Mechanism and Leasing Details

Apple Upgrade will adopt a subscription-like model.

During the lease period, users can pay off the device early, upgrade to a new model in advance, or keep the device after the lease ends; some operations will incur additional fees. Similar to car leases, users can also return the device at the end of the lease period.

For iPhone and Apple Watch, the lease term is 24 months; for Mac and iPad, the lease term is 36 months. Users must undergo a soft credit check (which will not affect their credit score) to qualify.

Background and Policy Adjustments

The plan is being launched as Apple has just raised the prices of various Mac, iPad, and other products by hundreds of dollars due to the industry’s ongoing memory chip shortage. The market also generally expects Apple to further increase prices when it releases the next-generation iPhone in September.

Apple plans to promote Apple Upgrade as a way to buy devices with lower monthly payments. At the same time, the company also plans to stop accepting new users for its existing two iPhone purchase plans, including the iPhone Upgrade Program and standard installment financing service, to make way for Apple Upgrade.

Unlike the current iPhone Upgrade Program, Apple Upgrade does not include AppleCare+ coverage. In addition, some products are not eligible for the plan, including Apple Watch SE, entry-level iPad, iPhone 16, and MacBook Neo. Corporate procurement and education discount orders are also excluded.

Apple previously considered launching an iPhone and hardware subscription plan financed by the company itself, but this was canceled in 2024. Choosing to work with Klarna now means that Apple can offer consumers a new way to purchase devices without having to take on the financial risks itself.

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