What Apple actually switched to
On July 28 Apple turns on Apple Upgrade, a lease-to-own plan for iPhones, iPads, Macs and Apple Watches, and retires the older iPhone Upgrade Program and its standard instalment financing. iPhones and Apple Watches run on a 24-month lease, iPads and Macs on 36 months. A light credit check gets you in, and the monthly payment is lower than the equivalent instalment plan because you are covering the device's expected depreciation, not its full price.
The financing sits with Klarna, the Swedish buy-now-pay-later lender, rather than on Apple's own books. Apple confirmed the launch date and the terms; Bloomberg first reported the plan and TechCrunch confirmed the Klarna tie-up. At the end of the term you choose one of three paths: hand the device back, pay a fee to upgrade to the newest model early, or settle the remaining balance and keep it for good.
Why Apple is doing this now
The plan is a direct answer to softening demand and a sticker price that keeps climbing. When a flagship iPhone crosses the point where the upfront number stalls the sale, spreading it into a monthly figure of a fixed, small size is the lever that moves units. Apple tried to build this financing muscle in-house and shelved that effort in late 2024 over software and regulatory friction; leaning on Klarna is the faster route to the same outcome.
There is a second motive under the first. A 24 or 36 month lease locks a customer into Apple's upgrade cadence and makes the next device a default rather than a decision. Bundling a lender also puts Apple in the credit relationship, next to the carriers and IT-leasing firms that used to own that ground. The company is not just selling a phone; it is renting a place in your monthly budget.
The catch when you never own the device
A lease is cheaper each month because you are paying for use, not ownership, and the residual value stays with Apple and Klarna. That is fine until you compare the total. Run a device to the end of a 36-month Mac lease and settle the balance and you can pay more than the outright price; return it early and you have rented an asset that still had years of life. The low monthly line hides where the money went.
The credit side matters too. A buy-now-pay-later lease is still debt, and in Europe it is about to be treated like it. The EU's revised Consumer Credit Directive brings BNPL products under formal credit rules from November 2026, and the UK's Financial Conduct Authority is bringing BNPL under its supervision in the same window. A US launch runs on lighter rules than the version Europeans will eventually be offered.
What buyers and fleets should do
For a single buyer the test is simple: if you upgrade every two years anyway, a lease can cost less than buying and reselling, provided you actually return the device instead of drifting into paying it off. If you keep hardware for four or five years, buying outright still wins. Decide which of the two you are before the setup screen decides for you with a low monthly number.
For anyone equipping a team, the arithmetic changes. Leasing moves devices off the balance sheet and turns a capital purchase into an operating cost, which helps cash flow but hands the residual value and the lock-in to Apple. It also means Apple, through Klarna, is now competing with your existing IT-leasing vendor on the same phones. Price both routes over the full term, in euros or pounds, before you sign a fleet onto a single supplier's cadence.
Read next: Apple Raised Prices in Four Different Ways | Sixty Apps Passed Review by Hiding From It
