The Apple Upgrade program, a lease-to-own scheme for iPhones, iPads, Macs, and Apple Watches powered by buy-now-pay-later financer Klarna, is set to launch on 28 July, according to a Bloomberg report published Tuesday, giving consumers a way to spread hardware costs across multiple years at a moment when Apple has already begun raising prices.
The timing is deliberate. Apple has been contending with an industry-wide shortage of memory chips, a supply crunch that manufacturers have taken to calling “RAMageddon,” driven largely by AI companies consuming memory at a pace that has squeezed supply for consumer electronics. Lease payments, spread across up to 24 months for iPhones and Apple Watches and up to 36 months for Macs and iPads, are Apple’s way of making those higher price tags easier to stomach.
What the Apple Upgrade Program Actually Offers
Customers will be able to keep their device at the end of the lease, return it, or trade up to a newer model, the last option being the source of the programme’s name. In some cases, Bloomberg noted, ‘transactions will incur an additional fee,’ though the report did not elaborate on the specific triggers.
Not every Apple product qualifies. AppleInsider reports that the Apple Watch SE, the base-level iPad, the iPhone 16, and the MacBook Neo are excluded from the programme. Business and education purchases are also ineligible. Approval requires a soft credit check conducted by Klarna, and customers will have the option to pay off the device early if they choose.
The new programme replaces more than just its predecessor. Apple plans to discontinue not only the existing iPhone Upgrade Program but also its standard instalment financing plans, according to Yahoo Finance. Apple intends to market Apple Upgrade as offering lower monthly payments than those current options. What remains unclear, as of 23 July 2026, is whether Apple Card Monthly Instalments or carrier instalment plans will continue alongside the new scheme, XenoSpectrum noted.
The shift also brings a meaningful change in terms. The outgoing iPhone Upgrade Program was backed by Citizens One and bundled AppleCare coverage into its monthly payments. The new Apple Upgrade program does not include AppleCare, meaning customers who want device protection will need to purchase it separately.
A Klarna Relationship That Has Been Building for Months
The partnership with Klarna is not new so much as deepened. Apple had previously attempted to build an in-house hardware subscription service but abandoned that effort in late 2024 after running into software and regulatory obstacles. Around the same time, Apple shut down Apple Pay Later. Klarna was subsequently integrated as a pay-later option within Apple’s Wallet app, rolling out in September 2025 across iOS 18 and iOS 26. The Apple Upgrade program represents the next stage of that relationship, extending Klarna’s role from payment processing into the lease structure itself.
Klarna’s investors wasted little time responding. Intraday trading on Tuesday saw Klarna shares move sharply on the news, with different snapshots of the session showing a range of gains: Seeking Alpha recorded a 5.0% rise in late-morning trading, while Yahoo Finance reported a 9% surge and other outlets cited moves as high as 11% at the session peak. The variance reflects different moments in a volatile trading day rather than any conflict over the underlying direction, which was unambiguously upward.
Apple and Klarna had not officially confirmed the programme as of 23 July 2026, meaning the Bloomberg report remains unverified by either company. An official announcement, presumably ahead of the reported 28 July launch date, would clarify the remaining unknowns: exact pricing, the fate of carrier plans, and the full list of eligible models.
For Apple, the commercial logic is straightforward. New chief executive John Ternus has inherited a company navigating rising input costs, a legal confrontation with OpenAI, and pressure to demonstrate that premium hardware can still find buyers at higher price points. A lease programme that reframes a large upfront cost as a manageable monthly outgoing does not solve the supply chain problem, but it does change the conversation at the point of sale. The question is whether consumers, once they read the fine print on AppleCare exclusions and device eligibility, find the offer as clean as the marketing will suggest.
