Apple has introduced Apple Upgrade, a new hardware leasing program available across the United States that lets customers pay monthly for an iPhone, Mac, iPad or Apple Watch instead of buying the device outright. The program is provided in partnership with Klarna and is available on the Apple Store online, in the Apple Store app, and at Apple Store retail locations.
Apple Upgrade offers one and two year leasing options for iPhone and Apple Watch, and two and three year options for Mac and iPad. Apple’s vice president of the Apple Store online, Karen Rasmussen, said the program is meant to give customers “a more flexible way to pay for the products they love,” both online and in-store.
Leasing prices start as low as $17.99 per month for iPhone, $11.99 for Apple Watch, $24.99 for Mac, and $11.99 for iPad. Customers can also reduce their lease payments by trading in an existing device through Apple Trade In.
When a lease term ends, customers can choose to upgrade to a new device, buy their current device outright, or return it and exit the program entirely. Buying the device outright means paying the difference between what has already been paid and the product’s list price. Notably, these three options aren’t limited to the end of the term customers can also upgrade or exit early by paying off the remaining lease balance, with no additional fees or interest. Apple has described the exit path simply as returning the device, upgrading to a new one, or buying out the device already in hand.
Apple Upgrade replaces the decade old iPhone Upgrade Program, extending leasing beyond iPhones for the first time and shifting from an installment financing model to a leasing model. Customers now undergo a soft credit check before selecting a device and lease term. Apple has also discontinued iPhone Payments, and its new leasing program carries lower starting prices than the old Upgrade Program.
One notable change: AppleCare+ is no longer bundled into the monthly payment as it was previously, meaning customers who want damage protection must add it separately. Existing iPhone Upgrade Program members can keep their current financing agreement through Citizens Bank until they’re eligible for a new device, at which point they can switch to Apple Upgrade or another payment method.
The launch comes amid an industry wide shortage of memory chips dubbed “RAMageddon” that has pushed up hardware costs and recently led Apple to raise prices on its Mac and iPad lineups. Analysts have suggested it may only be a matter of time before rising memory costs affect iPhone and Apple Watch pricing too.
