Apple Taps Klarna in a Lease-to-Own Program Rollout to Boost Device Sales
In Focus
- U.S. customers can lease an iPhone starting at $17.99 per month
- Customers paying more to lease premium Apple devices
- Apple allows customers to upgrade devices to the newest generation at the end of lease
Apple is partnering with Klarna to launch the Upgrade program in the U.S. Through the program, eligible customers can pay for devices through monthly installments. Customers can use the Apple Upgrade to buy a range of devices across online and offline outlets.
“At Apple, we put the customer at the center of everything we do and we’re thrilled that Apple Upgrade offers our customers, both online and in-store, a more flexible way to pay for the products they love,” Apple’s VP for the Apple Store Online, Karen Rasmussen noted in a company statement.
Can Customers Lease an iPhone from Apple?
Yes, U.S. customers can lease an iPhone starting at $17.99 per month. Apple’s lease-to-own program also allows customers to lease iPad and Apple Watch devices at $11.99 per month. Those who wish to lease a Mac are required to pay $24.99 per month.
The program offers one and two year leasing options for customers who wish to lease iPhones and Apple Watches. The lease period extends to two and three years for Mac and iPad devices.
Lease prices vary significantly with customers paying more for premium devices. For instance, the lease price for an unlocked iPhone 17 Pro stands at $31.99 a month for a two year period or $45.99 for one year.
Once the period ends, customers have the option of upgrading their devices to the newest generation. Alternatively, they could buy the current device by making a one-time payment or return it and quit the program. Apple has not included some of its entry-level devices like macBook Neo and iPhone 16 in the program.
Why has Apple Introduced the Upgrade Program?
Apple is exploring new ways to sell devices to address the seasonal nature of its business and reduce its reliance on hit device cycles for growth. The company’s iPhone leasing program is expected to encourage buyers to replace their devices sooner.
Currently, the average smartphone replacement cycle stands at nearly four years. The company introduces the program at a time when supply chain challenges are constraining production due to a memory chip shortage that has pushed hardware prices up. Recently, the iPhone maker increased prices of its iPad and Mac devices.
The Upgrade program allows Apple to make the rising prices more manageable for buyers. Apple says the onboarding process on Klarna is seamless. Customers will manage device leases through the Klarna app. Through the app, you can track payments and view billing schedules.
“ Apple and Klarna have created a simple enrollment process that provides customers with detailed information regarding their leasing options before they enroll,” The company added.
What the Upgrade Program Means for Apple
Apple’s new Upgrade program marks a shift towards a subscription-driven hardware business. It gives the company a steady source of revenue while encouraging customers to upgrade devices more frequently. If successful, this model could reduce Apple’s reliance on major product launches and boost customer loyalty.
