Apple has announced Apple Upgrade, a new program with the buy-now-pay-later company Klarna that lets US customers lease certain models of the iPhone, iPad, Apple Watch, or Mac for a monthly fee. Apple Upgrade replaces the iPhone Upgrade Program and the iPhone Payments installment plan. The 0% APR Apple Card Monthly Installments payment option remains available.
Basic Details
Customers can choose from 12- or 24-month leases for an iPhone or Apple Watch, or a 24- or 36-month lease for a Mac or iPad. Prices vary from $11.99 per month for a basic Apple Watch Series 11 to over $325 per month for a loaded Mac Studio. Longer leases have lower monthly fees but higher total costs. If you trade in a device when enrolling, that will lower your monthly costs, and if you use the Apple Card for the lease payments, you’ll get 3% cash back.
Not all products are included, so you can’t use Apple Upgrade to get an iPhone 16, iPhone 16 Plus, Apple Watch SE 3, MacBook Neo, Mac mini, iPad (A16), or Studio Display. I’m not surprised by the omission of the older iPhone 16 models, but why exclude the Apple Watch SE 3, MacBook Neo, Mac mini, base-level iPad, and Studio Display? My best guess is that Apple plans to refurbish and sell the devices returned from Apple Upgrade, but those products have lower resale values.
Nor is Apple Upgrade available for the Education, Government, or Veterans and Military Purchase Programs, Apple at Work for small businesses or enterprises, corporate Employee Purchase Programs, or the Apple Employee Purchase Plan.
If you’re leasing an iPhone, you must choose from AT&T, T-Mobile, or Verizon, and you can’t use a prepaid carrier plan (this is also true for the Apple Card Monthly Installments). That’s too bad, since if paying less is the goal, you can save significantly with a prepaid plan or an MVNO carrier like US Mobile or Consumer Cellular, as discussed in TidBITS Talk. That said, the iPhones leased through Apple Upgrade are unlocked, so you can switch among the eligible carriers.
iPhone Upgrade Program Comparison
Apple Upgrade works much like the now-defunct iPhone Upgrade Program, which also charged a monthly fee, but it’s different under the hood. The iPhone Upgrade Program was essentially an interest-free loan, whereas Apple Upgrade is a true lease. With the iPhone Upgrade Program, you could easily upgrade to the latest iPhone model for free after 12 payments, and after 24 payments, you owned the device outright. If you wanted to stop paying at any time, you could pay off the remaining balance and keep the iPhone.
With Apple Upgrade, you’re renting the device, and at the end of the lease, you must either return the device or purchase it with a one-time payment. You can also “upgrade to the latest generation,” but that mostly means Apple contacts you when the original lease ends and helps you start a new one.
Apart from taxes and a fee if you return a damaged device, Apple says you won’t pay more than the full price of the device: “the purchase option fee is the list price minus any lease payments you’ve made minus any remaining discounts or trade-in credit.” If you want to stop paying, you can terminate your lease and return the device, but Klarna will charge you “substantial fees,” presumably the purchase fee. If you do nothing at the end of the lease, it automatically converts to a month-to-month lease for up to 6 months, possibly with higher monthly payments. If you take no action at the end of the 6-month extension, Klarna will charge you the purchase fee.
Also, the iPhone Upgrade Program included AppleCare, whereas Apple Upgrade does not. It’s available, of course, but it will significantly increase the monthly costs. We generally recommend AppleCare for iPhones, as well as iPads and MacBooks that are regularly used on the go. If you don’t purchase AppleCare+ Theft and Loss for your iPhone, iPad, or Apple Watch, and it is lost or stolen, you’ll have to pay the early termination or purchase fee.
People currently enrolled in the iPhone Upgrade Program will have the option to lease a new device with Apple Upgrade, finance with Apple Card Monthly Installments, purchase the product outright, or choose carrier financing. Hopefully, Apple will make the transition clear.
Should You Lease Through Apple Upgrade?
Although the appeal of Apple Upgrade is obvious—less cash needed up front for an Apple device—I’m unenthused about Apple Upgrade. The only way it improves on the iPhone Upgrade Program is by including other products. The simplicity, carrier flexibility, and end-of-term ownership of the iPhone Upgrade Program and outright purchases seem better than Apple Upgrade’s voluminous fine print and administrative overhead.
Outright purchases are easy: order the new iPhone, activate it on your number when it arrives, and return your old iPhone in the packaging Apple provides within 14 days. It feels like there’s more that could go wrong with terminating and restarting Apple Upgrade leases. What if you forget to unfreeze a credit report when an upgrade happens, or your credit card is compromised while you’re traveling, causing a payment to fail?
There was initially another worry. 9to5Mac reported that code in the iOS 27 beta suggests that Apple could restrict leased devices if customers fall behind on payments. However, Apple told The Verge that, “There will be no restricted mode and/or there will be no limitations put on device functionality due to missed payments or default with the Apple Upgrade program.” It’s unclear what the “App Managed Features” system is for—perhaps other markets?—or whether Apple has backed down from it amid negative press.
Again, the attraction of Apple Upgrade is the ability to pay a small monthly fee rather than a large upfront price. As long as you’re aware of all the administrative details involving missed payments, early termination, returning devices, and more, it might be a good way to spread out the cost of an expensive Apple device.
