Apple has spent years quietly moving people from buying an iPhone outright to paying it off month by month. Apple Upgrade is the next step, and it is a bigger one. From 28 July, this new programme will let you lease an iPhone, Mac, iPad or Apple Watch through Klarna, then upgrade, buy or return the device when the term ends. Bloomberg's Mark Gurman, who broke the story, frames it as one of the biggest changes to how Apple sells hardware in years - and it comes with a catch that current customers should read carefully.

What Apple Upgrade actually is

Apple Upgrade is a leasing programme, not a traditional instalment plan. Instead of financing the full price of a device and owning it at the end, you pay a monthly fee to use the hardware for a fixed term. Klarna handles the financing side and runs a soft credit check when you apply, so checking your eligibility should not affect your credit score.

Klarna and Apple are not strangers here. Klarna became an official Apple reseller in the US back in 2024, complete with its own "Upgrade Financing" option inside its app. Apple Upgrade reads like that relationship formalised into an Apple-branded programme rather than a Klarna storefront.

The programme launches in the United States first, both in Apple's stores and online. There is no confirmed UK or international date yet, which is worth flagging given how many US-first schemes take a while to travel.

How the Apple Upgrade leases work

The terms depend on the device, but the shape is consistent. Here is what the reporting confirms so far:

iPhone and Apple Watch: 24-month leases. Two years of monthly payments before the term is up.
Mac and iPad: 36-month leases. Three years, reflecting the longer life Apple expects from its computers and tablets.
Three choices at the end. Upgrade to a newer model, pay off the balance and keep the device, or return it, much like handing back a leased car.
Early options exist, with fees. You can pay a device off early or upgrade before the term ends, though some of these moves may carry additional charges.

The framing Apple appears to be going for is a device subscription: a steady monthly cost with a built-in path to the next model. For anyone who replaces their iPhone every couple of years anyway, that is a familiar rhythm.

What you can and can't lease

Not every product qualifies. According to the reporting, Apple is steering the programme towards its mid-range and premium hardware and leaving the cheapest models out.

Reported as ineligible: the Apple Watch SE, the entry-level iPad, the iPhone 16 and the MacBook Neo.
Eligible: most current iPhone, iPad, Mac and Apple Watch models above those entry points.

That exclusion list makes sense from Apple's side. Leasing works best on higher-value devices with strong resale value, and the MacBook Neo sits at the budget end of the Mac line where the margins are tighter.

The iPhone Upgrade Program is being retired

This is the part existing customers should not skim. Apple is planning to stop new sign-ups for its current iPhone Upgrade Program and its standard financing, folding both into Apple Upgrade.

There is one meaningful difference between the old and new schemes. The iPhone Upgrade Program bundled in AppleCare+; Apple Upgrade does not. If you currently rely on that programme for both the hardware and the cover, the replacement asks you to think about AppleCare separately, and to budget for it separately too.

Why Apple is pushing leasing now

The timing is not an accident. Apple has raised prices across several product lines recently, and the new iPhones expected in September are widely tipped to cost more than last year's. I covered the earlier round in my write-up on the Apple Mac and iPad price increase, and the Mac mini price rise told a similar story.

Higher sticker prices make buyers hesitate. Lower monthly numbers make them hesitate less. A lease that turns a four-figure phone into a manageable monthly figure is a direct answer to price resistance, and it lands right before the most expensive iPhone launch of the year. It also locks people into a cycle: if upgrading is as simple as starting a new lease, more customers stay on the treadmill.

Should you actually use Apple Upgrade?

That depends entirely on how you treat your devices. Leasing suits people who always want the newest model and never intend to keep a phone past its prime. You get predictable payments and an easy upgrade path, and you never have to sell an old device.

It suits owners far less. If you keep an iPhone for four or five years, or you hand devices down within the family, paying to borrow hardware you would rather own makes little sense. The total cost of leasing and re-leasing will usually exceed buying once and holding on. The soft credit check is painless, but the long-term maths rewards people who like a fresh device far more than people who like to keep one.

Frequently asked questions

When does Apple Upgrade launch?

Apple Upgrade is reported to launch in the United States on 28 July 2026, available both in Apple's retail stores and online. An international rollout has not been confirmed.

Does Apple Upgrade include AppleCare?

No. Unlike the outgoing iPhone Upgrade Program, Apple Upgrade does not bundle AppleCare+. You would need to arrange cover separately if you want it.

Will leasing through Klarna affect my credit score?

Applying involves a soft credit check, which does not affect your score. How ongoing payments are reported can vary, so it is worth reading Klarna's terms before you commit.

My take

Apple Upgrade is a smart piece of business for Apple and a mixed deal for customers. Turning hardware into a subscription smooths over rising prices and keeps people cycling through new models, which is exactly what Apple needs heading into a pricier iPhone launch. That is good strategy, not a favour to buyers.

If you already upgrade every couple of years, this will probably save you effort and feel cheaper month to month. If you tend to hold onto your devices, ignore the low monthly figure and do the full sum, because owning still wins. The one thing nobody should overlook is the missing AppleCare. Read that detail before you swap a programme you already trust for a new one that quietly drops it.

Source: Bloomberg, reporting by Mark Gurman.