Apple rolls out a “rent-to-own” plan, easing the memory-price surge driven by monthly device payments

Apple plans to team up with Swedish fintech company Klarna on July 28 to launch the “Apple Upgrade” lease-to-buy device program, allowing consumers to purchase iPhone, iPad, Mac, and Apple Watch through monthly payments, with a maximum lease term of up to 36 months.
(Background recap: AI devours memory capacity! Apple can’t hold back on raising MacBook and iPad prices, and its stock plunges by more than 5%)
(Background detail: Apple is reportedly lobbying the Trump administration to allow “purchasing Chinese memory”! Analysts: Without relying on CXMT Storage DRAM, it’s hard to fend off Huawei.)

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• Lease term up to 36 months; at the end, you can keep it or trade in for a new device
• Memory doom pushes up hardware costs; Apple is forced to shift from defense to offense
• From selling a phone to collecting a monthly fee—Apple’s subscription ambitions

Apple is no longer satisfied with one-time hardware sales. Citing people familiar with the matter, Bloomberg reports that Apple has already reached an agreement with Swedish fintech company Klarna. The two will jointly build a new purchase channel called Apple Upgrade, which is expected to officially open to the public next Tuesday, July 28. At that time, iPhone, iPad, Mac, and Apple Watch will all be available via multi-year installment payments, so consumers won’t have to pay the full purchase amount upfront all at once.

Lease term up to 36 months; at the end, you can keep it or trade in for a new device

People familiar with the matter said the scheme adopts a “rent first, buy later” model, with Klarna serving as the financial support party, while Apple itself does not bear financial risk. When consumers apply, they must go through a one-time soft credit check, which will not affect personal credit scores. The initial launch is limited to the U.S. market, and applications can be made through Apple Store physical locations as well as online stores.

The Apple Upgrade plan is designed with two tiers: for iPhone and Apple Watch, which have shorter upgrade cycles, the lease term cap is set at 24 months; for Mac and iPad, where upgrade frequency is relatively lower, the program offers up to 36 months.

When the contract reaches its end, users have three exit paths: pay the remaining balance to keep the device, return it to end the contract, or use the old device as trade-in credit to upgrade to the next-generation product; if users want to settle early or upgrade ahead of schedule, in some scenarios they will need to pay additional fees. At the same time, Apple’s long-running iPhone Upgrade Program has officially entered its phase-out process, and all new applications are directed to the broader Apple Upgrade.

Memory doom pushes up hardware costs; Apple is forced to shift from defense to offense

Behind this leasing experiment is a cost battle that Apple cannot avoid.

This current chip shortage—described by the industry as “memory doom”—is pushing hardware costs steadily higher. The AI industry has nearly eaten up wafer production capacity and memory inventory, leaving a major contraction in supply for consumer electronics. Apple can only watch manufacturing costs climb. Apple has recently raised prices for some products in response, and the role of Apple Upgrade is precisely to split the large upfront purchase amount that consumers would otherwise pay into smaller monthly fees, thereby diluting the psychological impact brought by the price hikes.

What’s also worth noting is that this partnership is, for Apple, almost a no-brainer deal. Klarna takes on the program’s financial responsibilities, while Apple gains an additional sales channel without having to bear bad-debt risk. After the information was reported, Klarna’s stock price surged by as much as 11% at one point, ultimately closing up 1.4%; in contrast, Apple’s stock price was little changed that day. The market seems to view the interest-spread space Klarna can capture from this cooperation more favorably.

From selling a phone to collecting a monthly fee—Apple’s subscription ambitions

Transforming hardware such as iPhone and Mac into “monthly fee subscriptions” is, to a certain extent, an extension of Apple’s services strategy. In the past, Apple generated steady cash flow through services like the App Store, iCloud, and Apple Music. Now, the lease-to-upgrade plan turns the hardware itself into a continuing revenue source, while also lowering the barrier for consumers to switch to new devices.

In the short term, Apple Upgrade can help Apple maintain sales momentum during a period of price increases. In the long run, if this model is successfully replicated to markets beyond the United States, getting consumers to fund an iPhone through monthly payments may become a new norm for device purchases—no longer just a one-time transaction where you hand over the money and receive the goods.