Apple Upgrade is Apple’s new, Klarna-backed hardware leasing program in the US that lets you get an iPhone, Apple Watch, Mac, or iPad for a lower monthly payment and decide later whether you want to upgrade, buy, or return the device at the end of the term. In practice, it quietly reshapes how Apple sells hardware, replaces the familiar iPhone Upgrade Program, and nudges US customers toward treating their devices more like leased cars than owned gadgets.

Apple’s new way to “own” an iPhone

If you’ve followed Apple’s hardware financing story over the past decade, Apple Upgrade feels like a natural next chapter rather than a random experiment. For years, the company leaned on carrier installment plans and its own iPhone Upgrade Program, where you’d essentially finance the full cost of a phone, pay in installments, and own it at the end unless you traded in early. With Apple Upgrade, Apple is explicitly saying: you don’t have to own the device at all – you can lease it like a car, use it for a set term, and then decide what’s next.

The program is powered by Klarna, which handles the financial side, runs a soft credit check, and structures the lease behind the scenes. From a shopper’s perspective, though, it’s presented as just another payment option across the Apple Store online, the Apple Store app, and physical Apple Store locations in the US. The pitch is straightforward: lower monthly payments, clear term lengths, and more flexibility when you hit the end of your lease.

How Apple Upgrade actually works

Under Apple Upgrade, you can lease four product families: iPhone, Apple Watch, Mac, and iPad. Apple and Klarna offer 12- and 24-month terms for iPhone and Apple Watch, and 24- or 36-month terms for Mac and iPad, reflecting how long people typically keep each type of device. Monthly prices start at $17.99 for iPhone, $11.99 for Apple Watch, $24.99 for Mac, and $11.99 for iPad, with Apple giving concrete examples like an iPhone 17 Pro at $31.99 per month on a 24- month lease or a 14-inch MacBook Pro at $38.99 per month on a 36-month lease.

Enrollment is meant to feel almost frictionless. You choose your device and term online or in store, see your options laid out, then apply and get a decision within minutes, with Klarna running only a soft credit inquiry that doesn’t impact your score. If you’re approved, you finish checkout like you normally would: pick delivery or in-store pickup, walk out with your device, and get the usual Apple perks like Personal Setup and Today at Apple sessions to help you get up to speed. Lease payments begin about 30 days after your device ships or is ready for pickup, and if you pay with Apple Card, you get 3 percent Daily Cash back on those monthly lease payments.

The crucial moment comes at the end of the lease. Apple spells out three paths: upgrade to the latest generation by entering a new lease and returning your old device, pay a one-time purchase fee to keep it, or simply return the device and exit the program. If you do nothing, the lease can convert to a month-to-month arrangement for up to six months, with the possibility that your monthly payment goes up, before you’re eventually charged the purchase fee under your lease. It’s very much modeled on a classic car lease: use the hardware, keep it if you want, or hand it back and move on.

Apple Upgrade versus the old iPhone Upgrade Program

The launch of Apple Upgrade also marks a clean break from Apple’s previous iPhone financing model. In the US, Apple is shutting down both the iPhone Upgrade Program and iPhone Payments for new enrollments, steering customers instead toward Apple Upgrade, Apple Card Monthly Installments, outright purchases, or carrier financing. If you’re already in the old iPhone Upgrade Program, you’ll be allowed to finish your existing terms, and when your upgrade window comes, your options shift: lease a new device under Apple Upgrade, finance via Apple Card Monthly Installments, buy the phone outright, or go through your carrier.

There’s another key difference that will matter to anyone who’s used Apple’s previous upgrade scheme: AppleCare. Under the old iPhone Upgrade Program, Apple bundled AppleCare+ into the monthly payment, covering repairs and some accidental damage across the term. Apple Upgrade does not automatically include AppleCare; instead, Apple treats it as an add-on subscription, with users able to choose AppleCare+ for a single product or AppleCare One to cover multiple devices, both including accident coverage, theft and loss protection on eligible products, battery replacement, and 24/7 support. In other words, your monthly lease payment is lower, but you need to consciously add protection if you want the safety net.

A new player in US device financing

To understand why Apple is doing this now, it helps to look at the broader US device financing landscape. Over the last decade, carriers like Verizon, AT&T, and T-Mobile have pushed customers toward equipment installment plans and lease-style offers, promising low monthly payments and easy upgrades once you’ve paid off a certain portion of the device. Apple initially responded by creating its own upgrade program, but as tech journalists and analysts have noted, the mix of carrier plans, buy now pay later services, and Apple’s own financing options has gotten messy and fragmented.

Apple Upgrade consolidates some of that experience under Apple’s own umbrella while tapping Klarna’s infrastructure to manage leasing and risk. By framing the program as a lease instead of a traditional installment loan, Apple can advertise lower monthly prices and the flexibility of returning devices, which is increasingly appealing as phone and computer prices climb past the $1,000 mark. For Apple and Klarna, it also creates a recurring revenue stream tied to hardware, not just services, which fits neatly into Apple’s broader push to extend the lifecycle of its products and keep users inside its ecosystem.

Who Apple Upgrade is actually for

On paper, Apple Upgrade doesn’t target a single demographic – it’s available to US residents over 18 with a valid Social Security number or ITIN, a compatible credit or debit card, an Apple account in good standing, and a Klarna account. But practically, it’s aimed at people who like having the latest Apple hardware without swallowing the full purchase price, and who don’t mind the idea of never technically owning the device unless they choose the buyout option.

If you’re the kind of user who upgrades your iPhone every one or two years, and you view your phone almost like a subscription to Apple’s ecosystem, the leasing model may actually map well to your behavior. The same goes for creatives and professionals who rely on Macs and iPads for work but prefer predictable, lower monthly costs over large upfront investments, especially as Apple’s M series chips and AI capabilities evolve quickly from generation to generation.

There are, however, notable exclusions. Apple confirms that several devices – including iPhone 16, iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, iPad (A16), and Studio Display – are not available under Apple Upgrade. Business and education purchases are also out of scope, meaning enterprises and schools still need to rely on separate financing or leasing programs. Apple is clearly positioning Apple Upgrade as a consumer-focused offering, not a catch all solution for every segment.

The fine print: risks, fees, and carrier ties

Where there’s leasing, there’s fine print, and Apple Upgrade is no exception. Apple’s own documentation points out that this is a consumer lease, not a purchase or loan, with no security deposit but potential fees if you terminate early. If you close your lease and return the device before the end of the term, you can incur substantial fees, and while upgrades are allowed, they require entering a new lease, returning your prior device, and passing another eligibility and credit review.

Damage, loss, and condition at return also matter. Insurance is not included in the lease, and Apple warns that you may face damage fees if the device is lost, stolen, or returned in worse condition than your contract allows. This is where separate AppleCare coverage becomes more than a nice to have, especially if you’re leasing something like a MacBook Pro or iPad Pro you carry daily.

For iPhone specifically, the carrier angle remains important. To lease an iPhone via Apple Upgrade, you must select an eligible carrier – AT&T, T-Mobile, or Verizon – and you can’t pair the phone with a prepaid plan. The device itself is sold unlocked, so you can switch carriers as you go, but you still need to meet the carrier requirements and live within traditional US postpaid structures. It’s a reminder that Apple can streamline the financing experience, but the underlying telecom relationships still shape what’s possible.

What this means for the “ownership” mindset

Zooming out, Apple Upgrade says as much about how Apple sees the future of hardware as it does about any single payment option. Phones, watches, tablets, and laptops have become essential infrastructure for everyday life, and their prices have climbed steadily alongside their capabilities. Even in the US, where carrier subsidies still blunt some of the sticker shock, many consumers are sensitive to four-figure hardware prices and prefer predictable monthly costs that fit into a broader subscription stack of streaming services, cloud storage, and app purchases.

By shifting from “finance this device and own it” to “lease this device and decide later,” Apple is effectively decoupling usage from ownership for a large part of its lineup. The upside is flexibility: you can stay on a relatively fresh device without committing to long-term ownership, and you can avoid the hassle of reselling or trading in hardware yourself. The downside is that, if you’re always leasing, you may end up paying more over many years than you would have by buying outright and keeping devices longer, especially for Macs and iPads that stay usable well beyond three years.

For Apple, Klarna, and carriers, that tradeoff is part of the design. A customer who regularly leases and upgrades is a customer who stays active in the ecosystem, tries new hardware, and may be more likely to pay for AppleCare, cloud storage, and app subscriptions on top. For consumers, the decision comes down to how much they value hardware freshness, how comfortable they are with long-term monthly commitments, and whether they see their iPhone or Mac as something to own or something to access.

How US consumers can evaluate Apple Upgrade

If you’re in the US and wondering whether Apple Upgrade makes sense for you, the questions are surprisingly practical. First, how often do you upgrade now? If your pattern is already every one or two years, and you rarely keep devices long enough for them to feel truly “paid off,” the lease model might simply formalize what you’re doing and give you cleaner upgrade options. Second, do you care about owning the hardware at the end? If your plan is to buy and keep an iPhone or Mac for five or six years, a lease may not be ideal; but if you see yourself upgrading around the end of each term anyway, having an official exit route can be useful.

Third, how important is bundled protection? Apple Upgrade’s separation of AppleCare from the lease payment gives you more control, but it also makes it easier to skip coverage and absorb more risk, which is fine for some people and stressful for others. And finally, how comfortable are you with reading and living with fine print? Leasing is inherently more conditional than a straight purchase; there are eligibility rules, condition requirements, and potential fees to understand up front.

For Apple, though, the narrative is simple: Apple Upgrade is “a more flexible way to pay for the products they love,” as Karen Rasmussen, vice president of the Apple Store online, puts it. For US customers walking into an Apple Store this year, the reality is that the familiar iPhone Upgrade Program is gone, and a new leasing-first mindset has taken its place.