Apple launches Klarna-backed device leasing on July 28
Apple is replacing its hardware financing with a Klarna-backed leasing program, a move that lowers monthly costs for consumers facing steep price hikes while giving the struggling Swedish fintech a major distribution win.
Apple will launch a new hardware leasing program called Apple Upgrade on July 28, shifting away from direct device financing in one of the largest changes to its sales model in years. The system is backed by Klarna, the Swedish buy-now-pay-later firm, and will cover most iPhones, Macs, iPads, and Apple Watches. Apple plans to stop new enrolments in its existing iPhone Upgrade Program and standard financing to accommodate the transition.
The service functions like a car lease rather than a traditional loan. Customers can pay off a device early, upgrade before the term ends for an additional fee, or simply return the hardware when the lease expires. Terms run for 24 months for iPhones and Apple Watches, and 36 months for Macs and iPads, with a soft credit check required to qualify.
Masking sticker shock
The launch arrives just weeks after Apple raised prices by hundreds of dollars across its Mac and iPad lines due to an industrywide memory chip shortage. Analysts widely expect the company to apply similar increases to new iPhones arriving in September. By framing hardware as a monthly lease rather than a steep upfront purchase, Apple can soften the impact of these higher costs on consumers.
Notably, the new program does not include AppleCare, a sharp departure from the previous iPhone Upgrade Program. This omission follows a recent round of price increases for Apple's insurance product, which was also driven by elevated component costs.
A lifeline for Klarna
For Europe's fintech sector, the deal is a significant validation of the buy-now-pay-later model. Klarna's shares jumped as much as 11 percent on the news, offering a rare bright spot for a stock that has fallen sharply since its September 2025 IPO. Securing Apple as a distribution partner represents a major commercial win for the Swedish company.
Apple had spent years developing an in-house hardware subscription service before cancelling the effort in late 2024. The company abandoned those plans after running into software complications and regulatory concerns. Partnering with Klarna allows Apple to offer a modern leasing model without taking the underlying financial risk onto its own balance sheet.
Certain hardware will not be eligible for the program. Apple is excluding the iPhone 16, MacBook Neo, Apple Watch SE, and the entry-level iPad, alongside all business and education purchases.
