Apple has launched a new leasing program called Apple Upgrade, covering the iPhone, iPad, Mac, and Apple Watch, and replacing the company's prior device-financing offerings in the United States. The iPhone Upgrade Program and iPhone Payments are being discontinued with the launch of the new program, according to Apple's July 28 press release (Apple Newsroom).

Lease terms vary by product category. iPhone and Apple Watch are available on 12-month or 24-month terms; Mac and iPad carry 24-month or 36-month terms (Apple Newsroom). iPhone leasing starts at $18 per month (USA Today). The monthly fee remains fixed throughout the contract.

Apple promises that customers will not pay more than the full retail price of the device over the course of the lease, and in some cases will pay hundreds less. As a concrete example, an iPhone Air leased for two years accumulates $695.76 in total payments. To purchase that device outright at its $999 retail price, the customer pays an additional $303.24 (The Verge).

At the end of a lease, customers have three options: purchase the device by paying the remaining difference between what they have paid and the retail price, return the device, or upgrade to a new one (The Verge).

The financing itself runs through Klarna, the buy now, pay later service. Apple says the loans carry no interest and no late fees. Klarna spokesperson Clare Nordstrom clarified the default mechanism: if a customer misses three consecutive payments, Klarna terminates the lease and the customer owes the full outstanding balance. During the lease period, Klarna owns the device, and the customer is responsible for any damage (The Verge).

One notable detail: Apple spokesperson Brian Bumbery confirmed that the company will impose no limitations on device functionality due to missed payments or default. The phone, tablet, or Mac continues to work normally even if the lease falls into arrears (The Verge).

That last point is worth pausing on. Hardware remote-kill switches have been a contentious issue in device-financing programs for years, and there was a reasonable expectation that a lease-to-own model might pair with some form of software-level lockout for delinquent accounts. Apple has chosen not to do that. The enforcement mechanism is entirely financial: Klarna terminates the lease and pursues the balance. The device stays functional. This removes a category of consumer-protection concern that has shadowed other hardware-leasing arrangements, though it shifts risk onto Klarna as the device owner.

The Klarna partnership is the other notable structural choice here. Apple has historically kept consumer financing close to its own balance sheet or within tightly controlled partner relationships. Routing Apple Upgrade through a BNPL provider rather than a traditional issuing bank puts Apple adjacent to a regulatory environment that is still very much in flux. The Consumer Financial Protection Bureau has been scrutinizing BNPL providers, and treating these leases as no-interest consumer loans does not remove them from that scrutiny's reach. Apple's framing, no interest, no late fees, a simple monthly payment, positions the program as consumer-friendly, and on its face it is. But the ownership model is less simple: the customer is using a device that a third-party fintech company owns outright, with damage liability resting on the lessee.

For technology professionals, the practical impact is narrower than the marketing suggests. The program is US-only at launch. The device categories covered are the core consumer lineup, not accessories beyond the Watch. And the terms, particularly the fixed monthly payment and the purchase-option-at-end structure, are straightforward enough to evaluate against existing carrier installment plans or Apple Card financing for anyone who wants to run the math. The starting price of $18 per month for an iPhone is competitive with carrier-subsidized plans, but the absence of a carrier subsidy means the customer is paying the full device cost over time, just with flexibility on the back end.

The decision to consolidate iPhone Upgrade Program and iPhone Payments into a single, broader program also simplifies Apple's own product surface. Two separate financing options for the iPhone, plus the Apple Card monthly installments, created overlap that was genuinely confusing for retail customers. Folding the iPhone into a unified program that also covers Mac and iPad gives Apple one financing story across its hardware portfolio. Whether the market accepts a 36-month Mac lease is a separate question; that is a long time to be paying on a laptop in a category where refresh cycles typically run two to four years.