Consumer Tech

$768 in Lease Payments Buys None of the Phone

Apple Upgrade went live in the US on 28 July. Across four product lines the longest lease collects 70 to 75 percent of Apple's own purchase price, and AppleCare is no longer in the monthly.

Consumer TechBy Servola Tech Desk2026-07-306 min read

AI-assisted, edited by humans. | Editor-in-Chief: Leon Soliman | Editorial standards

$768 in Lease Payments Buys None of the Phone

Key takeaways

A 24-month lease on the iPhone 17 Pro that Apple's own footnote prices at $1,099 costs $767.76 in payments, which is 69.9 percent of the purchase price, and Apple's terms state you will not own the device at the end unless you pay a further purchase fee.
Apple Upgrade's monthly figure looks lower than the programme it replaced partly because AppleCare left the bundle. The old iPhone Upgrade Program required an AppleCare+ plan and financed it alongside the phone, so add the insurance back before you call the new price cheaper.
The 12-month iPhone lease costs $551.88 a year against $383.88 a year on the 24-month term, so a faster refresh cadence costs 43.8 percent more per year of use. Pick the cadence first, then read the monthly.
The programme is United States only and needs a Social Security Number or ITIN, so no European operator can sign up. Use the 70 to 75 percent ratio as the benchmark you hold your own euro or pound leasing quotes against.

The number Apple put in its own footnote

Apple switched on Apple Upgrade in the United States on 28 July, and it is the company's replacement for the iPhone Upgrade Program and its standard instalment financing. The programme covers iPhone, Apple Watch, Mac and iPad, and it runs through the Apple Store online, the Apple Store app and physical Apple Store locations. Leases start at $17.99 a month for iPhone, $11.99 for Apple Watch, $24.99 for Mac and $11.99 for iPad. iPhone and Apple Watch run on 12 or 24 month terms, Mac and iPad on 24 or 36. Klarna Inc carries the credit and owns the device for the length of the term. Karen Rasmussen, Apple's vice president of Apple Store online, said the company was thrilled to offer customers a more flexible way to pay.

The advertised entry price and the worked example are not the same product. Apple's own fine print takes the iPhone 17 Pro 256GB at a purchase price of $1,099 and prices it at $31.99 a month over 24 months or $45.99 over 12. That is 77.8 percent above the $17.99 headline. The first footnote is also worth reading before you plan a refresh, because it lists what the programme will not take: iPhone 16, iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, iPad (A16) and Studio Display. The cheaper and older hardware is exactly what is excluded.

AppleCare came out of the monthly payment

The programme being retired worked differently in a way that matters for any price comparison. Apple's own terms for the iPhone Upgrade Program describe a 24-month 0 percent APR instalment loan written with Citizens Bank, N.A., trading as Citizens One, and they require the customer to finance and activate an eligible iPhone with an AppleCare+ plan, choosing either AppleCare+ for iPhone or AppleCare+ with Theft and Loss. Insurance was not optional and it was inside the financed monthly figure. Upgrade eligibility arrived after at least twelve instalment payments.

Under Apple Upgrade, AppleCare is an add-on. The fifth footnote says customers can choose AppleCare+ to cover the new product or AppleCare One to cover several, which is the language of an option rather than a requirement. So part of the reason the new monthly reads lower than the old one is that a mandatory insurance premium was lifted out of it. If you are comparing the two numbers, put the cover back into the new one first. A device fleet without accidental damage cover is not the same purchase as a device fleet with it, and the difference shows up the first time a screen breaks rather than on the quote.

Seven tenths of the price, on every product line

Run Apple's four worked examples to the end of their longest term and the same proportion appears each time. The iPhone 17 Pro at $31.99 over 24 months comes to $767.76 against a $1,099 purchase price, or 69.9 percent. The 14-inch MacBook Pro with 16GB at $38.99 over 36 months comes to $1,403.64 against $1,999, or 70.2 percent. The 11-inch iPad Pro 256GB at $24.99 over 36 months reaches $899.64 against $1,199, or 75 percent. The Apple Watch Series 11 GPS 42mm at $11.99 over 24 months reaches $287.76 against $399, or 72.1 percent. Four different products, four different term lengths, and a band that never leaves 69.9 to 75 percent.

What that share buys is use, not equity. Apple's terms put it plainly: you will not own your device at the end of your lease, unless you pay the purchase fee. So the customer pays roughly seven tenths of the price, hands the hardware back, and the residual value stays with Apple and Klarna. That is a defensible deal if you genuinely want a two-year refresh and no disposal problem. It is a poor one if you were mentally treating the payments as progress towards owning the thing, which is precisely what the instalment loan it replaced actually did.

Upgrading faster costs more per year

The shorter term carries a premium that the monthly figure hides. Twelve months of iPhone 17 Pro at $45.99 is $551.88 for one year of use. Twenty-four months at $31.99 is $767.76, which works out at $383.88 for each year of use. Choosing the annual upgrade cadence therefore costs 43.8 percent more per year than the two-year one, for the same handset. That is the real price of always being on the newest model, and it is a decision to take before the monthly number frames it as a small difference.

Three other terms deserve attention. Ending a lease early attracts what Apple calls substantial fees. Devices returned lost, stolen or damaged outside lease condition attract damage fees. And if you reach the end of a term and do nothing at all, the lease converts to month-to-month for up to six months, with payments that may increase. Set against that, Apple offers 3 percent Daily Cash on lease payments made with Apple Card, which is issued by Goldman Sachs Bank USA. A cashback rate is a poor reason to choose a credit structure, and 3 percent does not move the 70 percent arithmetic.

What to take from a launch you cannot buy in Europe

Nothing here is available to a European buyer. Apple Upgrade is limited to United States residents, excluding territories, and enrolment requires a Social Security Number or ITIN, an accepted card, an Apple Account in good standing and a Klarna account. Apple's announcement names no European or United Kingdom timing. Klarna's own message to investors frames the deal as an extension of its fair financing strategy and, more revealingly, as a direct relationship with new US consumers that supports growth in engagement, average revenue per active customer and profitability. The lender is buying an ongoing relationship, not a one-off transaction, and that tells you what the product is designed to produce.

The transferable asset is the ratio. When an IT leasing vendor quotes you a monthly figure in euros or pounds, total the payments over the full term and divide by the cash price of the same configuration. If that number sits near seven tenths and you own nothing at the end, you are looking at Apple's structure under a different name, and the question becomes whether a guaranteed refresh and a clean disposal are worth the residual you are giving away. Check two things in every quote: whether support and accidental damage cover are inside the monthly or beside it, and what the buyout costs. Decide your refresh cadence first. The monthly payment should be the output of that decision, not the thing that makes it for you.

Frequently asked questions

Is Apple Upgrade available in the EU or the UK?

No. Apple launched it for United States residents only, excluding territories, and enrolment requires a Social Security Number or ITIN alongside a Klarna account. Apple's announcement gives no European or UK timing.

Does the lease include AppleCare?

No. AppleCare+ or AppleCare One is an optional add-on under Apple Upgrade. The iPhone Upgrade Program it replaces required an AppleCare+ plan and financed it with the phone, so the two monthly figures are not directly comparable.

Do the payments go towards owning the device?

No. Apple's terms state you will not own the device at the end of the lease unless you pay a separate purchase fee. Klarna owns the hardware during the term, and the payments cover use rather than equity.

The monthly figure is the most persuasive number Apple publishes and the least informative one. Total the payments, divide by the cash price, and ask what you hold at the end. On Apple's own examples the answer is seven tenths of the price and none of the hardware, and that is a straightforward rental of use rather than a cheaper way to buy.

AppleKlarnaApple UpgradeAppleCaredevice leasingIT procurementtotal cost of ownership

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