Apple launches ‘Upgrade’ device leasing program in partnership with Klarna

Apple is introducing a new leasing program in partnership with the “buy now, pay later” service Klarna, giving eligible customers the option to pay for Apple devices through monthly installments, the tech giant announced on Tuesday. The program is available for the iPhone, Apple Watch, Mac, and iPad on the Apple Store online, in the Apple Store app, and at Apple Store locations in the United States.

Leasing prices start at $17.99 per month for iPhone, $11.99 per month for Apple Watch, $24.99 per month for Mac, and $11.99 per month for iPad. Apple Upgrade offers one- and two-year leasing options for iPhone and Apple Watch, and two- and three-year for Mac and iPad.

At the end of the lease term, customers can upgrade to the latest generation of their device, purchase their current device with a one-time payment, or return it and exit the program, Apple says.

The rollout of the program comes as Apple has been struggling with supply chain issues related to “RAMageddon,” which refers to the industry-wide shortage of memory chips that is driving up the price of hardware. As a result, Apple recently announced price hikes for its Mac and iPad lineups, sparing the iPhone for now. The new Upgrade program seems to be Apple’s answer to making those higher prices more manageable for consumers.

Customers can manage their lease directly in the Klarna app, where they can view their billing schedule and track remaining payments.

With the launch of the new Upgrade program, Apple is discontinuing its existing in-house financing and installment programs in the U.S., which include the iPhone Upgrade Program and iPhone Payments.

The official launch follows a report from Bloomberg’s Mark Gurman last week, which revealed that Apple was preparing to introduce a lease-to-own program for its devices.

Apple says that when customers enroll in Apple Upgrade, they can lower their monthly lease payments by trading in their existing device through its Apple Trade In program. They can also earn 3% Daily Cash back when using Apple Card to make their lease payments.