Apple Shifts The iPhone To A Lease Model

On July 28, 2026, Apple launched Apple Upgrade, a leasing program in the United States that lets customers rent an iPhone, Apple Watch, Mac, or iPad through monthly payments rather than buy it outright. The financing is provided by Klarna, a buy-now-pay-later company.

Leases start at $17.99 a month for iPhone, $11.99 for Apple Watch and iPad, and $24.99 for Mac. Terms run 12 or 24 months for iPhone and Watch, and 24 or 36 months for Mac and iPad.

At the end of a term, a customer can upgrade to the newest model, buy the device outright, or return it and walk away. That last part is the point: the phone was never fully theirs to begin with.

Apple is retiring its older iPhone Upgrade Program and iPhone Payments in the U.S. to move customers onto this single leasing track.

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Apple is the world's most valuable consumer technology company, built on selling hardware at premium prices. Leasing marks a shift in how it collects that money, spreading a large one-time purchase into small recurring payments.

The timing explains the move. Apple is dealing with what the industry calls "RAMageddon," a memory-chip shortage driving up hardware costs, and it recently raised prices on Macs and iPads. Lower monthly payments make those higher prices easier to swallow.

Notably, Klarna carries the financing, not Apple. An iPhone listed at $1,099 can be leased and then bought for $1,099 with no added fee beyond taxes, so the draw is the smaller monthly number rather than a cheaper total.

The real change is rhythm. A phone sale happens once every few years. A lease turns that into a monthly relationship, and a customer paying every month is far more likely to upgrade the moment the term ends.

Leasing also lowers the barrier at the exact moment prices are climbing. A higher sticker price stalls a sale; $17.99 a month does not. Apple protects its premium pricing while keeping the phone within reach.

Putting Klarna on the hook for financing lets Apple capture the loyalty benefits of leasing without carrying the consumer credit risk itself.

For customers, the trade is ownership for affordability. Someone who leases continuously may pay indefinitely and never own anything, and tying phone access to a buy-now-pay-later provider raises questions about debt for people who stretch to afford a device.

Adoption is also unproven. Many people still prefer to own their phones, and Apple already offers zero-interest installments through Apple Card, so the leasing pitch must overcome habits and existing options.

The launch matters because it shows Apple treating the device less as a product it sells and more as a service people subscribe to. The real impact depends on whether customers embrace renting their hardware, or see it as paying forever for something they never keep.

Disclosure: This content is for educational and informational purposes only and does not constitute investment advice or recommendations. You should always conduct your own research or consult a qualified financial advisor before making investment decisions.