Apple Launches ‘Apple Upgrade’ Subscription Plan in US to Lower Upfront Hardware Costs

Apple has launched a comprehensive hardware leasing initiative in the United States named Apple Upgrade, marking a broader strategic pivot toward recurring hardware revenue as consumer electronics prices continue to rise across the tech sector.

The new program replaces Apple’s long-running iPhone Upgrade Program as well as its traditional installment financing for new applicants. Under the new system, customers pay a fixed monthly fee to use devices over multi-year lease terms, with options to trade in for newer models, purchase the hardware outright, or return it at the end of the contract. Existing members of the legacy iPhone program will remain active, though new enrollment has been closed.

To manage credit underwriting and regulatory risk, Apple has partnered with financial technology provider Klarna, which already handles Buy Now, Pay Later options within Apple Pay. Customers must undergo a credit approval process through Klarna, using its dedicated mobile application to track monthly billing and contract terms. Apple previously attempted to build a proprietary hardware subscription framework in-house around 2024, but those plans were shelved due to financial oversight challenges and balance-sheet risks.

Lease durations are split by product category. Handheld devices and wearables, including select iPhone and Apple Watch models, carry 24-month commitments starting at $17.99 and $11.99 per month, respectively. Tablets and personal computers—such as qualifying iPads and Mac computers—are structured on 36-month lease agreements, with entry pricing starting at $11.99 monthly for iPads and $24.99 for Macs.

However, the subscription service does not cover Apple’s entire hardware catalog. Excluded devices include the baseline iPhone 16, iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, the A16-powered entry iPad, and the Studio Display. Furthermore, AppleCare+ protection is not bundled into the base lease price, though users can add coverage separately during checkout or through the Klarna app.

Participants retain the option to terminate agreements early or buy out their device before lease completion, subject to additional processing fees. Upon reaching the end of the term, users can transition to a newer model under a fresh lease, complete a final payout to assume full ownership, or return the hardware to an Apple retail location without further obligation.

The rollout coincides with mounting inflationary pressures across global supply chains, which have recently pushed retail prices higher for several iPad and Mac configurations. Smartphone replacement cycles have also lengthened significantly worldwide in recent years, prompting major manufacturers to explore hardware leasing options to maintain predictable cash flow ahead of upcoming product updates.