Apple today replaced the iPhone Upgrade Program and iPhone Payments in the United States with Apple Upgrade, a consumer leasing product underwritten by Klarna, with advertised monthly payments beginning at $17.99 for iPhone and $11.99 for Apple Watch.

Apple today announced Apple Upgrade, a hardware leasing program provided by Klarna covering iPhone, Apple Watch, Mac, and iPad. The program is available on the Apple Store online, in the Apple Store app, and at Apple Store locations in the United States. According to Apple, the same launch discontinues two existing financing routes: the iPhone Upgrade Program and iPhone Payments will no longer be offered in the United States.

That substitution is the substantive change. Apple has offered installment purchasing for iPhone since 2015 through a program it ran itself in partnership with an insurer and a lender. What replaces it is a lease, and the counterparty is Klarna Inc., not Apple.

"At Apple, we put the customer at the center of everything we do," said Karen Rasmussen, Apple's vice president of the Apple Store online, "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."

How the terms are structured

Apple Upgrade offers 12- and 24-month leasing options for iPhone and Apple Watch, and 24- and 36-month options for Mac and iPad. According to Apple, 12- and 36-month terms are not available for every device model. Advertised entry prices are $17.99 per month for iPhone, $11.99 for Apple Watch, $24.99 for Mac, and $11.99 for iPad.

Customers enrolling for the first time can reduce monthly payments by trading in a currently owned device through Apple Trade In. Apple states that advertised monthly payment amounts may not include the estimated value of a trade-in device. Lease payments made with Apple Card earn 3 percent Daily Cash back. Apple Card is issued by Goldman Sachs Bank USA, Salt Lake City Branch, and is subject to credit approval.

Applications can be submitted online or in-store and are approved by Klarna. All applicants are subject to a soft credit inquiry, which according to Apple does not affect the applicant's credit score. No security deposit is required. In-store customers receive the device immediately; online customers choose delivery or in-store pickup. Lease information, including billing schedule and remaining payments, is managed in the Klarna app rather than in an Apple interface.

At the end of the initial term, three outcomes are available: upgrade to a newer device by entering a new lease and returning the prior one, purchase the current device with a one-time payment, or return it and exit. Upgrades are not guaranteed and are subject to eligibility and credit approval. Apple states that monthly payments on a new lease may exceed those of the prior lease.

What the disclosed examples cost

Apple published four worked examples in the program's fine print, each excluding taxes and trade-in credit. They are the clearest indication of how lease pricing compares with outright purchase.

An iPhone 17 Pro with 256GB of storage carries a purchase price of $1,099. The typical monthly payment is $31.99 on a 24-month term and $45.99 on a 12-month term. Those schedules total $767.76 and $551.88 respectively across the initial term.

An Apple Watch Series 11 GPS 42mm model has a purchase price of $399, with typical payments of $11.99 over 24 months and $21.99 over 12 months, totalling $287.76 and $263.88.

An 11-inch iPad Pro with 256GB carries a purchase price of $1,199 and typical payments of $24.99 over 36 months or $31.99 over 24 months, totalling $899.64 and $767.76.

A 14-inch MacBook Pro with 16GB has a purchase price of $1,999, with typical payments of $38.99 over 36 months or $53.99 over 24 months, totalling $1,403.64 and $1,295.76.

None of those totals conveys ownership. Apple states plainly that the customer does not own the device at the end of the lease unless the purchase fee is paid, and the amount of that purchase fee is not disclosed in the announcement.

The exit conditions

Terminating a lease before the end of the initial term may incur what Apple describes as substantial fees. If a customer takes no action at the end of the initial term, the lease converts to a month-to-month arrangement for up to six months, during which monthly payments may increase. If the extension period lapses without action, the purchase fee is charged automatically.

Insurance is not included. Damage fees may apply if a device is lost, stolen, or returned outside the condition the lease requires. AppleCare+ and AppleCare One are offered separately, and both include accident coverage, theft and loss protection on eligible products, battery replacement, and 24/7 support.

Who can and cannot enroll

The eligibility conditions are narrower than Apple's retail footprint. Leases are available only to United States residents, excluding residents of United States territories. Leased devices ship only to United States addresses, again excluding territories, or can be collected at United States Apple Retail stores.

Applicants must be at least 18 years old or the legal age in their state of residence, hold a valid Social Security Number or individual taxpayer identification number, present an accepted credit or debit card, maintain an Apple Account in good standing, hold a Klarna Account, and be able to receive security verification codes by text message.

Seven products are excluded from the program outright: iPhone 16, iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, iPad (A16), and Studio Display. That list removes several of the lower-priced entry points in each category, which shapes the average transaction value flowing through the program.

Leasing is also unavailable on refurbished accessories and through several online storefronts, including the Apple Employee Purchase Plan, participating corporate Employee Purchase Programs, Apple at Work for small businesses and enterprises, and the Government, Education, and Veterans and Military Purchase Programs.

One condition applies to iPhone alone. Leasing an iPhone requires selecting an eligible carrier - AT&T, T-Mobile, or Verizon - and prepaid carrier plans are not accepted. A leased iPhone remains unlocked, so carrier switching stays possible subject to carrier terms.

Existing iPhone Upgrade Program members are not stranded. According to Apple, when eligible they can lease a new device through Apple Upgrade, finance through Apple Card Monthly Installments, purchase outright, or take carrier financing. Apple Card Monthly Installments is a 0 percent APR option selected at checkout for eligible products, subject to credit approval and credit limit.

The hardware covered

The program spans the current lineup. On iPhone, that includes iPhone 17e with 256GB starting storage, iPhone 17 with a ProMotion display running up to 120Hz and a 48MP Dual Fusion camera system, iPhone Air, and the A19 Pro-powered iPhone 17 Pro and iPhone 17 Pro Max.

On the wrist, Apple Watch Series 11 carries hypertension notifications and sleep score, with up to 24 hours of battery life and glass Apple says is twice as scratch-resistant as the Series 10 equivalent. Apple Watch Ultra 3 offers up to 42 hours of battery life, or up to 72 hours in Low Power Mode, and built-in two-way satellite communications.

Mac coverage includes 13- and 15-inch MacBook Air with M5 and up to 18 hours of battery life, MacBook Pro across the M5, M5 Pro, and M5 Max chips, the M4 iMac, and Mac Studio with M4 Max and M3 Ultra. On iPad, the program covers iPad Air with 12GB of unified memory, iPad Pro with M5 and an Ultra Retina XDR display, and iPad mini.

Why this matters for the marketing community

The commercial weight of this arrangement sits with Klarna rather than with Apple's device business, and that is where the advertising relevance lies.

Klarna's advertising revenue reached $180 million in 2024, up from $13 million in 2020, equal to roughly 6 percent of the company's $2.8 billion in annual revenue, according to the SEC filing it submitted on March 14, 2025. That same filing disclosed credit losses of $495 million in 2024, equivalent to 18 percent of total revenue, which is the structural reason the company has pushed so hard into a higher-margin advertising line. Klarna's ad products draw on browsing, search, and transaction histories, and run across sponsored search, an affiliate program, and programmatic brand ads.

An Apple-branded lease book adds high-ticket, long-duration relationships to that base. A 36-month MacBook Pro lease is a three-year billing relationship inside the Klarna app, considerably longer than the four-instalment pay-later transactions that built the company. The announcement makes no statement about whether lease data feeds Klarna's advertising products, and no such claim should be read into it. What is verifiable is the shape of the relationship: monthly billing, in-app management, and a merchant of unusual scale.

Klarna has been assembling advertising infrastructure for several years. Its Ads Manager platform rolled out globally on November 13, 2023, and the company opened programmatic access to its inventory through a PubMatic partnership announced in 2024, which cited click-through rates three times the industry average within the Klarna network. The company's ad formats include product cards, native banners in transaction detail pages and marketing emails, IAB standard banners, featured store placements, and post-purchase offers.

Payment financing has also been absorbed into the ad-adjacent checkout layer elsewhere. Google added Klarna and Affirm as buy-now-pay-later options inside Google Pay when it expanded the Universal Commerce Protocol on May 20, 2026, embedding instalment financing into agentic checkout without requiring merchants to negotiate terms individually. The direction of travel is consistent: financing is becoming a default component of commerce surfaces rather than a merchant-by-merchant integration.

The macro numbers explain why. Buy-now-pay-later drove $75 billion in United States online spend across 2023, up 14.3 percent year over year, and BNPL usage on Cyber Monday 2024 reached $991.2 million, with 75.2 percent of those transactions running through mobile devices. Payment flexibility now functions as a merchandising variable, and monthly-price framing changes how premium hardware appears in shopping comparisons and ad creative.

For Apple, the move lands during a period of unusual activity in its own advertising business. The company rebranded Apple Search Ads as Apple Ads on April 14, 2025, added multiple ad positions inside App Store search from March 3, 2026, launched Apple Business in more than 200 countries on April 14, 2026, and confirmed Maps advertising for the United States and Canada during its April 30, 2026 earnings call, which reported a record $111 billion quarter against an installed base of 2.5 billion active devices. A July 2026 update to the Apple Ads Terms of Service broadened the contractual language to describe advertising surfaces Apple does not necessarily own.

Apple Upgrade is not an advertising product, and nothing in the announcement connects it to Apple Ads. But it does route a recurring United States consumer billing relationship through a company whose own strategy explicitly treats retail media as its path to profitability. For marketers tracking where commerce, payments, and media inventory converge, that is the detail worth recording.

There is one further wrinkle worth noting. Klarna Technologies AB won damages against Google and Alphabet on July 1, 2026, when Stockholm's Patent and Market Court found that changes Google made in 2017 to satisfy a European Commission order never ended the abuse the Commission had condemned. The judgment fixed principal damages at 950,000,000 British pounds for the United Kingdom market alone. A company that has spent years litigating against a dominant search platform is now the financing layer beneath a dominant device platform.

Timeline

Summary

Who: Apple and Klarna Inc., with Karen Rasmussen, Apple's vice president of the Apple Store online, representing the company. The change affects United States consumers, existing iPhone Upgrade Program members, carriers AT&T, T-Mobile, and Verizon, and marketers tracking commerce media and payment infrastructure.

What: Apple Upgrade, a consumer leasing program provided by Klarna covering iPhone, Apple Watch, Mac, and iPad. Terms run 12 and 24 months for iPhone and Apple Watch and 24 and 36 months for Mac and iPad, with advertised entry payments of $17.99, $11.99, $24.99, and $11.99 respectively. The launch discontinues the iPhone Upgrade Program and iPhone Payments in the United States. Seven products are excluded, including iPhone 16, Apple Watch SE, Mac mini, and Studio Display.

When: Announced July 28, 2026, with availability effective at launch.

Where: The Apple Store online, the Apple Store app, and Apple Store locations in the United States. Leases are unavailable to residents of United States territories and cannot ship to territory addresses.

Why: Apple positions the program as a more flexible payment route across its device categories. For the advertising industry, the arrangement places a recurring United States billing relationship with a company that has built a retail media business generating $180 million in 2024 advertising revenue against $495 million in credit losses, at the same moment Apple's own advertising operation is extending from the App Store into Maps and, per revised contract language, potentially beyond Apple-controlled surfaces.