Apple is reportedly launching a new leasing program for its devices next week in partnership with the financial tech company Klarna. Starting July 28, customers will be able to lease iPhones, iPads, Macs, and Apple Watches through monthly third-party payments. In other words, Apple has entered the “buy now, pay later” era. And, to put it bluntly, I consider it bad for you, the consumer, and not a great look for the brand itself.
The new program, reportedly called Apple Upgrade, uses a subscription model: you can lease an iPhone or Apple Watch for 24 months, or a Mac or iPad for 36 months. During the leasing period, customers can pay off their device early to keep it, upgrade to a newer model, or return the device altogether at the end of the term—much like a car lease.
The new plan also means Apple will be phasing out iPhone Upgrade, the decade-old iPhone payment program that includes annual upgrades and AppleCare+. Additionally, entry-level products, including the Apple Watch SE, basic iPad, iPhone 16, and MacBook Neo, will not be eligible for the Apple Upgrade program, nor will business and education purchases.
Apple Upgrade comes in the wake of Apple raising prices across its product lineup, from hardware like Macs and iPads to services like Apple Music and AppleCare+ (notably, AppleCare+ will not be bundled with Apple Upgrade). These price hikes are, of course, a symptom of the ongoing memory chip shortage spurred by the skyrocketing demand for AI data center infrastructure, with seemingly no financial relief in sight. But, even as prices surge, companies still need to convince customers to buy their products.
While the Apple Upgrade program might make sense on paper, it tarnishes the tech giant’s reputation. By incentivizing customers to purchase top-of-the-line products at a lower up-front cost, Apple is leveraging its brand trust and the tech industry’s dire state to coerce people into taking on debt for products they don’t need.
Cheapening a Storied Brand
Furthermore, the Klarna partnership cheapens Apple’s premium brand identity, which was in part achieved by its extremely insular ecosystem. Apple makes its own chips, offers its own services, and, until now, has handled its own upgrade program. According to Bloomberg, Apple planned to launch a hardware subscription service entirely on its own in 2022, but the project got canned in 2024. Now that Klarna’s involved, however, Apple is happy to launch a payment program without having to shoulder any financial responsibility.
The fact that Apple’s most affordable offerings aren’t eligible for the program is a huge red flag that Apple Upgrade isn’t in customers’ best financial interest. Apple Upgrade isn’t designed to increase affordability or benefit the customer, but simply to boost sales. In fact, the program may even be actively hostile to customers: code found in the iOS 27 beta suggests that Apple may limit device functionality for customers who miss lease payments. That’s like shutting off the AC if you were late on a car payment.
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Buy now, pay later programs (BNPL) like Klarna exploit the instant gratification of shopping to sway customers into making impulse purchases they otherwise may have passed on. According to Forbes, these programs mainly appeal to customers with low financial stability, while simultaneously charging higher fees than credit card companies—making the short-term gain ultimately not worth the long-term cost.
In an age of endless subscriptions and price hikes, people are sick and tired of paying for access to products rather than owning them. Subscription fatigue is real and only getting worse; according to a 2023 Harvard Business School study, nearly 75% of consumer-facing companies offer some form of subscription service. Why can’t we just buy things to own anymore?
For as long as we’re stuck with subscriptions, always be wary when a company has you spend money on something it can lock you out of—or take away from you entirely.
About Our Expert
Bee Wertheimer
Editorial Intern
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I’m a New York-based writer currently serving as PCMag’s Editorial Intern. I cover the impact of technology and internet culture on our daily lives, with a specialization in video games and cultural criticism.
I have written for Kotaku, The A.V. Club, Unwinnable, Aftermath, and more. In addition, I have a formal background in video game development and visual design. You can find all of my work on my website.
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