Apple to launch Upgrade device leasing program with Klarna
Apple is launching a Klarna-backed device leasing program to spur hardware sales amid rising component costs driven by the AI boom.
Apple will introduce a hardware subscription service called Apple Upgrade in the United States on July 28. The tech giant is partnering with Klarna Group to finance the initiative. Apple plans to phase out new enrollments in its existing iPhone Upgrade Program and standard financing options to clear the way for the new offering.
The program functions as a traditional lease rather than an installment loan. Customers can pay off their device early, swap to a newer model before their term expires, or keep the hardware at the end of the contract. Apple will market the leases as carrying lower monthly payments than its current financing structures.
Shifting Hardware Economics
The launch reflects a strategic adjustment to escalating component prices. Apple has already raised prices on MacBooks, iPads, and most non-iPhone hardware. The company can no longer shield consumers from the surging cost of memory and storage chips, a direct result of the massive data-center buildout driven by artificial intelligence.
Leasing offers a mechanism to sustain unit sales volume when outright purchase prices rise. This approach shifts the upfront financial burden away from the consumer. By lowering the monthly barrier to entry, Apple can maintain its hardware upgrade cycle without compressing its own profit margins to absorb the chip costs.
Klarna's Expanding Role
Outsourcing the financial backing to Klarna is a notable shift for Apple's hardware sales strategy. For Klarna, securing a high-profile consumer electronics lease validates the buy-now-pay-later firm's push into broader credit markets. The partnership also allows Apple to effectively remove consumer credit risk from its own balance sheet.
The new program has specific limitations that investors should note. It will not include AppleCare, distinguishing it from the outgoing iPhone plan. Several newly released or entry-level devices—the iPhone 16, MacBook Neo, Apple Watch SE, and entry-level iPad—are excluded from eligibility.
Business and education purchases are also barred from the leasing option. Representatives for both Apple and Klarna declined to comment on the upcoming launch.
