Apple's new financing plan, Apple Upgrade, has launched, with consumers able to make a monthly lease payment for a higher-end iPhone, iPad, Mac, or Apple Watch.
Previously leaked on July 21, Apple has now officially launched Apple Upgrade, its new leasing program. Replacing existing initiatives like the iPhone Upgrade Program, Apple Upgrade expands what U.S. consumers can lease to more than just iPhones.
Under Apple Upgrade, consumers can lease an iPhone or Apple Watch for either 12 or 24 months, and 24 to 36 months for Macs and iPads. At lease maturity, users can simply exit the program and return their device, return and upgrade to a new device, or buy out the device they have.
The buyout price is simply the difference between the device's original MSRP and the total before interest that they've paid during the term of the lease. That means while it's no bargain, users won't ever pay above MSRP for their device, outside of interest on the plan.
Users have the option to upgrade early at any point during their lease. If they want to upgrade early, they must pay off the remaining payments, making it a better deal towards the end of the lease rather than the beginning.
Unlike early rumors of the Apple Upgrade program suggested, Apple does not have the capability to disable or limit phone features due to non-payment.
Easy signup for users
Apple has been working on making the signup process for Apple Upgrade easy and the whole experience is built into the Apple Store app and the online store. It's also available in physical Apple Stores.
Users merely choose any of the eligible items, choose their storage and color options, and move to checkout. They will get various payment options, depending on the device.
For example, when attempting to purchase an iPhone, users will see multiple payment options including paying it outright, carrier deals, financing with Apple Card, and the new Apple Upgrade program.
To help lower the initial leasing terms, users can opt to trade in a device when making their purchase. This, too, is baked into the checkout flow.
Customers signing up will need to pass a soft credit check with Klarna, which is taking over financial duties under the program. As a soft credit check, it will not impact credit scores, nor will users be redirected to any outside site during the signup.
One more asterisk to consider is that iPhone leases do require users to select a carrier to use the phone with. That said, the phones remain unlocked and users are free to swap carriers at will.
While consumers can use the program with a wide array of models across the Apple catalog, there are some exceptions, primarily base units. You cannot use the plan to get the Apple Watch SE, the base-level iPad, the iPhone 16, iPhone 16 Plus, Mac mini, Studio Displays, nor the MacBook Neo.
Business and education purchases are also not permissible under the program.
Bye bye, iPhone Upgrade Program
The new plan replaces the previous iPhone Upgrade Program that did a similar thing. However, the replacement works with Macs, iPad, and Apple Watch purchases, not just iPhones.
Under the previous decade-old program, consumers would pay a monthly fee to lease their iPhone. They too had the opportunity to upgrade once per year to the latest iPhone models, provided the customer had made 12 monthly payments.
Aside from the range of hardware available, the new plan does have a downside. It doesn't include AppleCare+.
The iPhone Upgrade Program included AppleCare+ with Theft and Loss as standard. This effectively meant that subscribers would almost always be able to use an iPhone, or get a replacement if necessary.
Apple is using this as an opportunity to nudge consumers to its AppleCare One plans that can bundle multiple devices together.
While iPhone Upgrade Program is going away, it won't shutter immediately. It is being closed to new applications, and existing users can continue to use the service.
