Pricing undercuts the old program on paper. iPhones lease starting at $17.99 a month, Apple Watch at $11.99, Mac at $24.99 and iPad at $11.99. iPhone and Apple Watch run 12- or 24-month terms, and Mac and iPad stretch to 24 or 36. No security deposit is required, and enrollment runs on a soft credit check. At the end of a term, customers get three paths: sign a new lease on the next device, buy the current one outright, or hand it back and walk away. Billing now lives in the Klarna app rather than Apple's own systems.

The timing isn't a coincidence — and iPhone 18 makes the case concrete. The rollout lands as Apple works through supply issues tied to "RAMageddon," the industry-wide memory chip shortage pushing hardware costs higher. According to Counterpoint’s Memory Tracker, DRAM and NAND prices are seeing spikes of 200%-300%+ YoY. Apple has already confirmed it will raise prices on its products this year, and it already did so on Mac and iPad in June. Leasing is the standard playbook when list prices climb and a company wants to protect the monthly number a buyer actually sees.

For Apple, this is a volume and mix play. A leasing structure defends unit volume against further price increases while quietly nudging buyers toward higher-ASP configurations, since the current upgrade plan excludes N-1 devices. It's another lever for first-time iOS conversions and Android switchers, and it shortens the effective replacement cycle by making the next upgrade feel frictionless. It is also a clever play by Apple. By routing the credit relationship through Klarna instead of financing in-house, Apple captures the loyalty and volume benefit without carrying the receivables — or the credit risk — on its own balance sheet. It's an immediate ROI for Apple, and it arrives right as the company needs buyers to keep saying yes to a lineup that's getting more expensive.

For Klarna, the payoff is structural, not promotional. Klarna now owns the lease agreement and inherits a large, recurring receivables book tied to one of the most valuable hardware ecosystems on the planet — a real expansion beyond its traditional BNPL footprint, and a strong signal for its next chapter as a public company. Big-ticket purchases are exactly where financing options move the needle on affordability, and BNPL continues to work its way into the mainstream of US digital shopping. Apple users tend to have strong credit, making them a high-value customer for Klarna.

For consumers, the pitch is simple — if not quite complete. Cheaper monthly access to the newest Apple hardware, with just a soft credit check and a postpaid number confirmation during setup. However, AppleCare+ is no longer folded into the payment the way it was under the old program, so protection against damage, loss or theft becomes an added cost to the consumer. This will likely be a win for Apple, as consumers will pay extra for that peace of mind. With carriers lowering promotions on devices, this new Upgrade Program might see additional uptake from consumers looking for alternative payment options.

It will be interesting to see how return-versus-buyout behavior on Apple Upgrade compares to the trade-in patterns we've seen from traditional payment options. The iPhone 18 isn't just the next iPhone cycle. It's the first real stress test of whether Apple's leasing bet pays off.

Learn more about the US Smartphone Market:

Our US Smartphone Channel Share Tracker Monthly Report analyzes model-level sell-through volumes by OEM, sales channel, and price bands. It dives further into OEM performance insights and carrier promotions. The sales channels covered in the report include Verizon, AT&T, T-Mobile, Spectrum, Xfinity, Cricket, Metro by T-Mobile, Boost, Verizon Prepaid, Best-buy, Walmart, Target, Amazon and USA OEM. This is additional analysis accompanying the model level database of US Monthly Smartphone Sell-through by Channel.

The US Smartphone Promotions Tracker and Index monitors pricing and discount activity in the smartphone promotional landscape, covering major postpaid and prepaid carriers. It tracks every smartphone available at each carrier and identifies the key characteristics of each promotion. These characteristics are represented in the Promotion Index Score, a metric that quantifies the terms of each promotion.

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