Apple Upgrade Klarna leasing starts for iPhone, Mac, iPad and Watch

Apple Upgrade Klarna leasing is now available in the United States, giving eligible shoppers a new way to spread out payments on Apple hardware, Apple said Tuesday. For investors watching Apple’s hardware business, the move matters because it can make high-priced devices feel more affordable at checkout without cutting list prices.

The program, called Apple Upgrade, covers iPhone, Apple Watch, Mac and iPad purchases made through the Apple Store online, the Apple Store app and physical Apple Store locations in the U.S., according to Apple. Klarna, a “buy now, pay later” company, is handling the monthly payment side of the program. Buy now, pay later means a customer gets a product upfront and pays over time, usually through scheduled installments.

How does Apple Upgrade with Klarna work?

Apple says customers lease the device for a set term, then choose what to do when the term ends. Leasing means the customer pays monthly to use the device during the agreement, rather than owning it outright from day one.

At the end of the lease, Apple says customers can move to the newest version of the device, buy the device they already have with a single payment, or return it and leave the program. Customers can manage the lease in Klarna’s app, including viewing the billing schedule and checking how many payments remain.

Starting monthly prices are:

• $17.99 for iPhone
• $11.99 for Apple Watch
• $24.99 for Mac
• $11.99 for iPad

Apple says iPhone and Apple Watch leases come with one-year and two-year options. Mac and iPad customers can choose two-year or three-year leases.

The company also said customers can reduce their monthly lease payment by trading in an eligible device through Apple Trade In. Apple Card users can earn 3% Daily Cash back when they use the card for lease payments, according to Apple.

What changes for Apple’s old payment plans?

Apple is ending its existing U.S. in-house financing and installment offerings as Apple Upgrade launches, according to TechCrunch. Those programs include the iPhone Upgrade Program and iPhone Payments.

The shift puts Klarna in a more central role for Apple device financing in the U.S. Customers will still buy through Apple’s retail channels, but lease management moves into Klarna’s app.

Why is Apple offering a leasing program now?

The launch comes after pressure on hardware pricing tied to an industry-wide shortage of memory chips known as “RAMageddon,” TechCrunch reported. The shortage has contributed to higher hardware costs, and Apple recently raised prices for Mac and iPad models while leaving iPhone prices unchanged for now, according to TechCrunch.

A leasing offer can lower the monthly cost shown to customers, even when the full device price remains high. That mechanism is especially relevant for products such as Macs and iPads, where recent price increases may make upfront purchases harder for some households.

Bloomberg’s Mark Gurman reported last week that Apple was preparing a lease-to-own device program with Klarna. Apple’s announcement confirms the rollout across its main hardware lines in the U.S.

This story draws on original reporting from TechCrunch.