Apple to lease iPhones for $17.99/month via Klarna partnership
▼ Summary
– Apple announced a new leasing program called Upgrade, in partnership with Klarna, offering iPhone leases starting at $17.99 per month for up to two years.
– The program also includes lease options for Apple Watch, Macs, and iPads, and is available at Apple retail and online stores after a soft credit check.
– The leasing launch follows recent Apple price hikes on iPads and Macs due to the global memory crunch, with analysts expecting iPhone prices to rise as well.
– Leasing allows Apple to shift focus from high upfront costs to lower monthly payments, potentially smoothing seasonal sales and reducing reliance on device upgrade cycles.
– Devices must be returned after the lease term, with options to purchase or upgrade; no security deposit is required, and Klarna will terminate leases after three months of missed payments.
Apple is rolling out a new way for U.S. customers to get its devices without paying full price upfront, launching a device leasing program starting at $17.99 per month for the iPhone. The company announced the initiative on Tuesday, naming it Upgrade, and it will be available both in Apple’s physical retail stores and through its online shop.
The program is a partnership with Klarna, the buy now, pay later provider. After a soft credit check, customers can choose between a one-year or two-year lease for an iPhone. Similar leasing options will be offered for the Apple Watch, along with two- or three-year leases for Macs and iPads. No security deposit is required, and while Klarna will not charge late fees, it will terminate leases after three consecutive missed payments.
This news arrives just a month after Apple raised starting prices on iPads and Macs by at least $100, with some models jumping by over $1,000, citing the global memory crunch. Analysts now expect iPhone prices to rise this year as well, and they argue that leasing allows Apple to shift consumer attention from a steep up-front cost to a more manageable monthly figure.
“Most of Apple’s consumers, especially in the U. S. and other developed markets, are buying devices on installment plans or trade-ins, so we can expect to see much more aggressive offers,” said Nabila Popal, senior research director at IDC, in a CNBC interview following Apple’s price hike announcement in June.
Apple has long been exploring ways to offer iPhones through installment payments, a strategy investors believe can help smooth out the seasonality of its business and reduce reliance on hit device cycles for growth. The new leasing model could also push customers to upgrade more frequently. According to Bernstein estimates, the average iPhone replacement cycle has stretched to nearly four years.
Under the lease terms, devices must be returned at the end of 24 months. At that point, users can either purchase the phone with an additional payment or trade up to a newer model. The program is designed to make Apple’s premium hardware more accessible, even as prices climb across the lineup.
(Source: CNBC)
