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. 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 stays the same throughout the contract.

Apple says 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. For example, an iPhone Air leased for two years adds up to $695.76 in total payments. To buy 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 runs through Klarna, a service that lets people split purchases into installment payments. Apple says the loans carry no interest and no late fees. Klarna spokesperson Clare Nordstrom explained what happens if you fall behind: if a customer misses three consecutive payments, Klarna terminates the lease and the customer owes the full remaining 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 not limit device functionality due to missed payments or default. The phone, tablet, or Mac continues to work normally even if the lease falls behind (The Verge).

The broader context here is that some device-financing programs have used software locks to disable a phone or tablet when payments stop — a practice that has drawn consumer-protection criticism for years. There was a reasonable expectation that a lease model might include that kind of lockout. Apple has chosen not to. The enforcement is purely financial: Klarna terminates the lease and pursues the balance. The device keeps working. This removes a worry that has shadowed other hardware-leasing arrangements, though it shifts risk onto Klarna as the company that actually owns the device.

The Klarna partnership is the other structural choice worth examining. Apple has historically kept financing close to its own books or within tightly controlled partner relationships. Routing Apple Upgrade through a buy-now-pay-later company rather than a traditional bank puts Apple next to a regulatory environment that is still changing. The Consumer Financial Protection Bureau has been scrutinizing these types of providers, and calling the leases no-interest consumer loans does not place them outside that scrutiny. 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 separate financial company owns outright, with damage liability resting on the person leasing it.

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. The terms are straightforward enough to compare 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 because there is no carrier subsidy, the customer is paying the full device cost over time, just with flexibility at the end.

The decision to consolidate the iPhone Upgrade Program and iPhone Payments into a single, broader program also simplifies Apple's own offerings. Two separate financing options for the iPhone, plus 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 lineup. In my view, 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 people typically replace their devices every two to four years.