Apple is set to launch a new device leasing program called Apple Upgrade on July 28, backed by Klarna, that will let U.S. consumers pay monthly for iPhones, Macs, iPads, and Apple Watches — and it could spell the end of the company’s familiar iPhone Upgrade Program.

According to Bloomberg’s Mark Gurman, the service will roll out through Apple’s physical and online stores, initially in the United States. It marks a significant shift in how Apple wants you to pay for hardware, moving from installment loans to a more flexible, lease-style arrangement that lets you upgrade, keep, or return devices.

But the devil will be in the details — and many of those details remain provisional. Until Apple publishes official terms, anyone considering the program should treat the eligibility rules, final costs, and upgrade conditions with caution.

What Actually Changed

Apple Upgrade introduces a subscription-like payment model for most consumer versions of iPhone, Mac, iPad, and Apple Watch. Instead of paying the full retail price upfront or through a traditional installment loan, you make monthly payments over a fixed term. At the end — or before — you can upgrade to a new model, pay off the remaining balance, keep the device, or return it.

The reported term lengths vary:

Device Category Agreement Length
iPhone 24 months
Apple Watch 24 months
Mac 36 months
iPad 36 months

These terms are longer than some financing offers — especially for Macs and iPads, which stretch to three years. That lowers the monthly payment but keeps you financially attached to the hardware longer.

The program requires a soft credit check for approval. It does not include AppleCare+, unlike Apple’s current iPhone Upgrade Program. If you want damage protection, you’ll pay extra.

Several products are reportedly excluded: Apple Watch SE, entry-level iPad, iPhone 16, MacBook Neo, and all business and education purchases. Apple may adjust this list, but if you’re eyeing a budget model, it likely won’t qualify.

Klarna, not Apple, will handle the financing. This mirrors Apple’s recent strategy of leaning on third-party lenders rather than running lending services itself (the company shut down Apple Pay Later, its own buy now, pay later product, in recent years). That means your contract will be with Klarna, and you’ll need to understand its credit policies, late-fee structures, and dispute-resolution processes.

Apple also plans to stop new enrollments in its existing iPhone Upgrade Program and some other financing options once Apple Upgrade launches, according to reports. That’s a big change for customers who’ve relied on that program’s bundled AppleCare+ and annual upgrade path.

What It Means for You

For iPhone Owners and Frequent Upgraders

If you upgrade your phone every year or two, Apple Upgrade might simplify your life. You’ll get a predictable monthly bill, a clear path to the latest model, and you won’t have to haggle with a reseller or carrier when you’re ready to switch.

But don’t confuse a low monthly payment with a low total cost. Without bundled AppleCare+, you’ll need to factor in protection separately — and if you ever want to trade in or return a device, any damage could trigger extra charges. Cracked screens, dents, or battery degradation could make returning a lease more expensive than owning.

Also, an “upgrade” isn’t necessarily a free reset: you may still need to pay off some portion of your remaining balance. The exact rules haven’t been disclosed.

For Mac and iPad Buyers

A 36-month term makes a $2,000 MacBook look like a more palatable monthly expense, which might push some buyers toward higher configurations. But three years is a long time in tech. Your needs could change, and you might find yourself stuck with a device that no longer fits your workflow — or stuck with a bill that outlasts your interest in the hardware.

Early payoff options will be critical. If you have to settle a large remaining balance to exit early, the flexibility may be an illusion.

For Windows Users and the PC Market

You won’t walk into an Apple Store for a leased Surface Pro, but the ripple effects could reach you. Apple’s scale and retail presence often set consumer expectations. If the new program succeeds, expect Microsoft, Dell, HP, Lenovo, and Samsung to offer similar or improved device leasing and upgrade programs — possibly bundling accidental-damage coverage or extended warranties to compete.

Still, ownership still has advantages, especially for gamers, enthusiasts, and IT pros. A desktop PC can be upgraded, repaired, and customized over many years. A leased MacBook is a closed box you must return in good condition. The right choice depends on whether you value convenience or long-term control.

How We Got Here

Apple’s payment options have ballooned over the last decade. The evolution looks something like this:

  • Pre-2015: Buy outright or through carrier contracts with subsidies.
  • 2015: Apple introduces the iPhone Upgrade Program, combining a 24-month installment plan with AppleCare+ and an annual upgrade option.
  • 2019: Apple Card launches with 0% monthly installments on Apple purchases.
  • 2023: Apple launches Apple Pay Later, a short-term BNPL offering, then cancels it in 2024 after deciding to work with third-party lenders instead.
  • 2026: Apple partners with Klarna to launch Apple Upgrade, a leasing-style program that unifies device financing under one roof.

This latest move lets Apple keep its retail experience streamlined while offloading the lending risk. It also comes as smartphone upgrade cycles have lengthened to over three years. A leasing program can push more people to upgrade on a predictable schedule, even if they don’t strictly need a new device.

What to Do Now

If you’re tempted by Apple Upgrade on July 28, take these steps before handing over your SSN for that soft credit check:

  1. Wait for the official terms. Everything reported so far is provisional. Apple will publish the real agreement, including APR, fees, final payment details, and device condition requirements. Read it.

  2. Calculate the full cost. Don’t compare monthly payments — compare total cost of ownership. Multiply the monthly payment by the number of months, add any upfront tax or fees, and include a possible balloon payment. Then add the cost of AppleCare+ if you want protection equivalent to the old iPhone Upgrade Program.

  3. Compare alternatives. Could you buy the device outright with a 0% credit card offer? Does your carrier have a better trade-in deal? Is a refurbished model enough? Rushing into a lease because the monthly number is small can cost you more over time.

  4. Check what’s excluded. Entry-level iPads, Apple Watch SE, iPhone 16, and business/education purchases won’t qualify. Don’t plan your purchase around a program you can’t use.

  5. Consider your upgrade and return habits. If you keep phones for four years, a leasing program will likely leave you paying more than buying outright. If you always want the latest, the convenience might be worth it — but only if the math checks out.

  6. Protect your device. Since AppleCare+ isn’t bundled, factor in a case, screen protector, or insurance if you plan to return a device in good condition. A small accident could turn into a large penalty.

Outlook

Apple’s move into leasing with Klarna could reshape how millions of people think about hardware ownership. The program will launch in the U.S. first, but a global rollout would put further pressure on the entire consumer electronics industry to move toward subscription-like models.

For now, the most important date is July 28 — not just because the program goes live, but because that’s when we’ll finally see the fine print. Until then, treat Apple Upgrade as an interesting option, not a guaranteed better deal.