Apple has announced a new partnership with buy now, pay later (BNPL) provider Klarna to introduce a device leasing program called Apple Upgrade for U.S. customers. The program allows users to lease eligible Apple devices, including iPhone, iPad, Mac, and Apple Watch, with flexible terms. Specifically, customers can choose 12- or 24-month leasing options for iPhone and Apple Watch, and 24- or 36-month options for Mac and iPad. Leasing prices start at $17.99 per month for iPhone, $11.99 for Apple Watch, $24.99 for Mac, and $11.99 for iPad [1].
Participants in the Apple Upgrade program can trade in their current devices through Apple Trade-In to reduce their monthly payments. At the end of the lease, customers have the option to upgrade to the latest model, purchase the leased device outright, or return it. With the rollout of Apple Upgrade, Apple will discontinue its iPhone Upgrade Program and iPhone Payments, which previously allowed qualified customers to purchase an iPhone via a 24-month, interest-free installment loan and included AppleCare+ and upgrade options after 12 payments [1].
The partnership with Klarna reflects the growing trend of Americans using installment plans for online purchases, with a Gallup survey indicating that about 51% of Americans have used such plans. However, Apple Upgrade is structured as a lease rather than a traditional BNPL loan [1]. The program is available through Apple's website and U.S. Apple Store locations [1].
Following the announcement, Apple Inc. (AAPL) shares rose by 1.17% to $336.91, while Klarna Group PLC (KLAR) shares increased by 6.51% to $18.49 [1].
CONCLUSION
Apple's new leasing program with Klarna marks a strategic shift from installment-based device purchases to a leasing model, aiming to attract more customers seeking flexible payment options. The positive share price movements for both Apple and Klarna suggest investor optimism about the partnership's potential to drive device sales and recurring revenue.