Apple Inc. is replacing its long-running iPhone Upgrade Program with a broader device leasing service, marking a shift in how it sells its hardware as the technology giant seeks to keep customers upgrading more frequently despite rising device prices.
The new Apple Upgrade program, launched in the U.S. in partnership with Klarna, allows consumers to lease iPhones, iPads, Macs and Apple Watches through fixed monthly payments rather than purchasing them outright. The move expands Apple’s financing strategy beyond smartphones and reflects a broader industry push toward subscription-like hardware ownership.
The program offers 24-month lease terms for iPhones and Apple Watches and 36-month terms for Macs and iPads. At the end of each lease, customers can upgrade to a newer device, purchase the product by paying the remaining balance, or return it.
Apple has also decoupled AppleCare+ from the financing package, making the extended warranty optional instead of mandatory. The change reduces monthly payments but could leave some customers without accidental damage protection unless they choose to add it separately.
The launch comes as Apple grapples with lengthening smartphone replacement cycles and higher manufacturing costs driven by advanced chips and artificial intelligence features. By lowering the upfront cost of premium devices, Apple is betting that predictable monthly payments will encourage consumers to replace their hardware more often.
The company has increasingly relied on financing programs, trade-ins and subscription services to sustain hardware sales in mature markets where annual smartphone upgrades have become less common.
Apple Upgrade also replaces new enrollments in the iPhone Upgrade Program and Apple’s standard iPhone financing option in the United States, streamlining its consumer financing offerings into a single platform.
Industry analysts say the move could strengthen customer retention by keeping users within Apple’s ecosystem while creating a more recurring revenue model around its hardware business. Similar leasing models have long been used by wireless carriers, but Apple is now bringing more of the customer relationship under its own brand.
The strategy also positions Apple to better manage future price increases. As flagship smartphones, premium tablets and AI-enabled computers become more expensive, spreading costs over several years could make high-end devices more accessible without lowering retail prices.
The program is currently limited to the United States, with no timeline announced for international expansion. Existing members of the iPhone Upgrade Program will be able to complete their current upgrade cycle before transitioning to the new service or choosing other financing options.
For investors, the initiative signals Apple’s continued evolution from a company that sells products to one that increasingly monetizes long-term customer relationships through recurring payments, subscriptions and services—a strategy that has become central to sustaining growth as global smartphone demand matures.