Apple has launched Apple Upgrade, a new leasing program provided by Klarna that lets U.S. customers lease devices including the iPhone starting at $17.99 per month. The rollout on July 28, 2026, replaces the older Citizens One-backed iPhone Upgrade Program and arrives amid rising component and memory costs.
Apple is shifting the focus from a higher up-front sticker price to a lower monthly payment through a new device-leasing service launched in physical retail stores and online channels across the United States. The service, developed in partnership with buy now, pay later provider Apple, allows eligible customers to lease hardware after passing a soft credit check that does not impact their credit score.
The change marks a notable pivot in how consumers acquire premium electronics, arriving just weeks after Apple raised prices of its MacBooks, iPads, and other devices in response to ongoing global memory and storage shortages. While iPhones escaped those immediate increases, industry watchers anticipate price hikes across the upcoming smartphone lineup later in the year.
Pricing Tiers and Device Eligibility Under the Klarna Partnership
Under the new program, monthly leasing terms vary by hardware category. iPhones and Apple Watches feature 12- and 24-month lease options, while Macs and iPads carry 24- and 36-month terms. Leasing prices start as low as $17.99 per month for the iPhone, $11.99 for the Apple Watch, $24.99 for the Mac, and $11.99 for the iPad.
Specific hardware models command higher monthly rates depending on configuration. An unlocked iPhone 17 Pro costs $31.99 a month for two years, or $45.99 a month for a one-year term. Meanwhile, some entry-level devices such as the iPhone 16 and MacBook Neo are excluded from the program entirely.
Customers can lower their monthly obligations further by trading in existing hardware through Apple Trade In or earning 3 percent Daily Cash back when making lease payments with an Apple Card. At the end of a lease term, participants can upgrade to the newest generation, purchase the device with a one-time payment, or return it to exit the program.
The End of Citizens One Financing and the Citizens Upgrade Era
The launch of Apple Upgrade brings an immediate termination to the older iPhone Upgrade Program, which first debuted alongside the iPhone 6s and iPhone 6s Plus in September 2015. Existing participants with active upgrade windows must transition to new payment methods, as Apple is no longer accepting new enrollments for the legacy service.
The structural difference between the two offerings is substantial. The retired program operated as an installment loan backed by Citizens One where monthly payments went directly toward the purchase price, and it automatically bundled AppleCare warranty coverage. The new Klarna-backed system functions strictly as a lease where Klarna retains ownership of the hardware throughout the term, and AppleCare is sold separately as an optional add-on.
“At Apple, we put the customer at the center of everything we do, 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.”
Karen Rasmussen, Apple’s vice president of the Apple Store online
Market Strategy and Component Pressures Behind the Shift
Financial analysts note that aggressive leasing options align with broader consumer habits in developed markets. According to Nabila Popal, senior research director at IDC, the vast majority of consumers purchase hardware through installment plans or trade-ins, making flexible financing essential for maintaining sales volume.
“Most of Apple’s consumers, especially in the U.S.”
Nabila Popal, senior research director at IDC
The restructuring also addresses slowing upgrade cycles. Bernstein estimates place the average iPhone replacement cycle at nearly four years, a duration Apple hopes to compress by making annual device swaps simpler. Furthermore, component-level teardowns from TechInsights indicate that rising memory costs could add significant expenses to upcoming devices, reinforcing the need for alternative financing structures as Apple pushes its product mix further upmarket toward expected foldable models and pro tiers.
Klarna stock gained 3.9% to close at $19.50 following initial reports of the partnership. Meanwhile, CEO Tim Cook is scheduled to deliver his final earnings report as chief executive before transitioning to executive chairman of the board.
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