Apple is reportedly launching a new device leasing program called "Apple Upgrade," with Klarna serving as the financial backer. Bloomberg's Mark Gurman first reported the details, which were subsequently confirmed by The Verge on July 21, 2026. The program is slated to launch on July 28.

Apple Upgrade will replace the existing iPhone Upgrade Program and standard financing for new iPhones, extending a car-lease-style model across most of Apple's major product lines. Customers will sign up via a soft credit check and then choose, at the end of their lease term, among three options: upgrade early to a new device, keep the current device, or return it (The Verge).

The program will be available for most new iPhone, Mac, iPad, and Apple Watch purchases. Lease terms differ by product category: iPhones and Apple Watches will carry 24-month leases, while iPads and Macs will be on 36-month terms. Budget-tier devices are excluded from eligibility, specifically the base iPad, iPhone 16, Apple Watch SE, and MacBook Neo (The Verge).

One notable departure from the outgoing iPhone Upgrade Program is that Apple Upgrade will not bundle an AppleCare subscription. The prior program folded AppleCare into its monthly payment; the new leasing structure separates device payments from protection plans, leaving customers to purchase AppleCare independently if they want it.

The choice of Klarna as the financial partner is a meaningful signal. Apple has historically handled consumer financing through Citizen's Bank for its iPhone Upgrade Program and Apple Card monthly installments via Goldman Sachs. Bringing in Klarna, a buy-now-pay-later specialist that has been expanding into broader consumer credit, suggests Apple is repositioning device financing from a bank-backed installment model to something closer to a managed lease with a fintech infrastructure layer. The soft credit check requirement is consistent with Klarna's existing underwriting approach for its consumer credit products.

The structural shift from "financing" to "leasing" carries practical implications for how customers interact with their devices. Under a traditional installment plan, the customer owns the device once payments are complete. Under a lease, the lessor retains ownership unless the lessee exercises a purchase option. Apple's three end-of-term choices (upgrade, keep, return) mirror the architecture of auto leases, where residual value, mileage or usage conditions, and early-termination terms define the economics. Apple has not publicly detailed the residual-value formulas or early-upgrade windows, so the precise cost-to-own math remains unclear until launch.

The tier exclusions also tell a story. By leaving out the iPhone 16, base iPad, Apple Watch SE, and MacBook Neo, Apple is steering the leasing program toward mid-range and premium SKUs where higher residual values make lease economics more predictable and where the upgrade cycle is a stronger selling point. A 36-month Mac lease on a higher-end configuration, for instance, aligns the payment period more closely with the replacement cadence of a professional or prosumer user, whereas a 24-month iPhone lease matches the annual-or-biennial upgrade rhythm Apple has cultivated for years.

In this author's view, the removal of AppleCare from the bundled payment deserves attention. AppleCare has been a high-margin services revenue line for Apple, and decoupling it from the financing stream could go either way: it may reduce friction for price-sensitive customers who can now lease without paying for coverage they did not want, or it may simply shift AppleCare purchases into a separate transaction without materially affecting attach rates. The outcome will depend on whether Apple actively promotes AppleCare as an add-on at the point of lease signing or treats it as a post-purchase upsell.

For enterprise and IT procurement teams, the leasing model is familiar territory. Device-as-a-service programs have been a staple of corporate fleet management for years. What is new here is Apple applying the same logic to consumer purchases at scale, with a fintech partner rather than a traditional bank. If the program gains traction, it could shorten the effective replacement cycle for premium Apple devices and increase the volume of refurbished units flowing back through Apple's trade-in and resale channels.

The launch date of July 28 gives the program a runway ahead of Apple's typical September iPhone event, where new flagship models would naturally drive upgrade demand under the new lease structure.