Apple is shutting down the iPhone Upgrade Program and replacing it with something much bigger: a Klarna-backed leasing scheme called Apple Upgrade that covers iPhone, iPad, Mac, and Apple Watch. For U.S. customers, this is now the primary way Apple wants you to finance a new device, and it starts as low as $17.99 a month for an iPhone.
What Is Apple Upgrade, Exactly?
Apple Upgrade is a leasing program, not an installment loan. You’re essentially renting your hardware for a fixed term with the option to return it, trade up, or buy it outright at the end of the lease. Apple has partnered with Klarna, a short-term consumer credit provider, to underwrite and manage the leases.
The program runs only in the U.S. for now and replaces two familiar options: the iPhone Upgrade Program and iPhone Payments. New iPhones can no longer be purchased through those legacy plans; Apple Upgrade is the successor.
Key structure details:
- Devices covered: Most iPhone, iPad, Mac, and Apple Watch models.
- Lease terms: 12 and 24 months for iPhone and Apple Watch; 24 and 36 months for Mac and iPad.
- Provider: Klarna handles approvals, billing, and lease management.
- Availability: Online and in Apple Stores in the U.S.
Lease approvals use a soft credit check, so applying won’t impact your credit score. Once you’re in, all the gritty details — billing schedule, total price, remaining payments — live in the Klarna app.
Apple Upgrade Pricing: Cheaper Than the Old iPhone Plan?
Apple is positioning Apple Upgrade as more affordable than the retired iPhone Upgrade Program, and the headline numbers back that up.
Base pricing starts at:
- iPhone: from $17.99 per month
- Apple Watch: from $11.99 per month
- Mac: from $24.99 per month
- iPad: from $11.99 per month
Apple also shared example “typical” payments (before taxes and any trade-in credits):
- 256GB iPhone 17 Pro (retail $1,099): $31.99 per month on a 24‑month lease, or $45.99 a month for 12 months.
- 42mm Apple Watch Series 11 (retail $399): $11.99 a month on a 24‑month lease, or $21.99 for 12 months.
- 256GB iPad Pro (retail $1,199): $24.99 a month on a 36‑month lease, or $31.99 over 24 months.
- 14‑inch MacBook Pro (16GB) (retail $1,999): $38.99 per month for 36 months, or $53.99 for 24 months.
Those numbers can drop further if you trade in an existing device. Instead of a one-time lump sum, your trade-in value is spread across the lease as a monthly credit.
One critical change: AppleCare+ is now optional and not baked into the monthly price. You can still add AppleCare+ or AppleCare One, but the payment will stack on top of the lease instead of being bundled as it was with the old iPhone Upgrade Program.
How Ownership Works Under the New Leasing Model
The biggest philosophical shift with Apple Upgrade is ownership. With the iPhone Upgrade Program, you were effectively paying off a phone over time. With Apple Upgrade, you’re paying to use it.
At the end of your lease term, you have three choices:
- Return and walk away: Send the device back in the prepaid box Apple provides and exit the program.
- Pay to own: Make a one-time payment (the remaining difference between what you’ve paid and the device’s retail price, minus any remaining trade-in credits) and keep the hardware.
- Return and upgrade: Send the old device back and start a new lease on a newer model.
There’s no financing markup here: Klarna isn’t charging a separate fee on top of the device price. If you end up buying a $1,099 iPhone 17 Pro through Apple Upgrade, your total payments will add up to $1,099 before taxes — the same as if you’d bought it outright.
If you don’t choose one of those paths when the term ends, your lease shifts into a month-to-month arrangement for up to six months. The monthly payment stays the same, but any trade-in credit that was applied during the fixed term stops, so your effective cost can rise. At the end of that extra window, if you still haven’t returned or purchased the device, you’ll be charged the purchase fee and the device becomes yours.
Carrier Lock-In, With a Twist
There’s a notable catch for iPhone leases: you must pick a plan from AT&T, Verizon, or T‑Mobile. Prepaid plans and MVNOs — like Mint Mobile or Visible — are explicitly excluded from Apple Upgrade for iPhones.
That sounds restrictive, but there is an important nuance. The phones themselves are still sold unlocked, so you can switch carriers later. The limitation applies when you set up the lease, not forever. Still, if you’re using a smaller carrier today or rely on prepaid service, Apple Upgrade might push you to rethink your setup or skip the program altogether.
What’s Excluded From Apple Upgrade
Despite its wide reach, Apple Upgrade doesn’t cover everything Apple sells. Several high-profile and budget-minded devices are left out.
Not eligible for Apple Upgrade:
- iPhone 16 and iPhone 16 Plus
- Apple Watch SE
- MacBook Neo
- Mac mini
- iPad (A16)
- Studio Display
On top of that, the program can’t be stacked with certain discounts or channels:
- No education (EDU) pricing
- No refurbished devices
- No Apple Employee Purchase Plan
- No business, government, veteran, or military purchasing programs
In other words, Apple Upgrade is firmly aimed at mainstream U.S. consumers paying full retail, not students, businesses, or bargain hunters who typically chase refurbished hardware.
The Fine Print: Fees, Damage, and Missed Payments
As with any lease, Apple Upgrade comes with rules — and some of them bite if you’re not careful.
Ending or Extending Your Lease
You can end a lease early by returning your device, but Apple warns of “substantial fees.” In practice, that means you’ll owe the remaining lease balance. Cancel three months before the end, and you’ll still pay those three months. There is no penalty for paying off the lease early if your goal is to own the device sooner.
When your lease term runs out, you have to make a move: upgrade, return, or buy. If you stall, you slide into that month-to-month tail period for up to six months, after which Klarna will bill the purchase fee automatically.
Damage, Loss, and Theft
Because Apple Upgrade is built around returning devices, condition matters. Klarna inspects hardware when you send it back and charges for damage.
- With AppleCare+: you’ll pay the relevant service fee for covered damage.
- Without AppleCare+: you’re on the hook for the full assessed cost of repairs or replacement.
Loss or theft can also trigger charges, so anyone who tends to treat their phone or laptop casually should factor coverage into their monthly budget.
What Happens If You Miss Payments
Klarna lets a missed payment roll into the next month’s bill and doesn’t add late fees. However, missing three payments in a row is a hard stop: the lease terminates, and you must pay the full outstanding balance minus whatever value Klarna assigns to the returned device. If Klarna can’t collect, your account can be handed to debt collection agencies.
There is a bit of flexibility baked in. Klarna support can grant a one-month payment deferral and may offer an early lease termination plan with structured repayment.
How Apple Card Fits In
Apple isn’t killing off Apple Card Monthly Installments. If you prefer traditional financing where you clearly own the device at the end, that option remains, separate from Apple Upgrade.
But the company is giving Apple Card users a reason to lean toward leasing. If you pay your Apple Upgrade bill with Apple Card, you’ll get 3 percent Daily Cash back on each monthly payment. That effectively trims the cost of the lease a bit, especially on bigger-ticket Macs and iPad Pro configurations.
Why Apple Is Retiring the iPhone Upgrade Program
Shutting down a well-known program like the iPhone Upgrade Program isn’t a small move. Apple Upgrade signals a strategic pivot: Apple wants its hardware business to look more like a subscription.
By tying more customers to predictable monthly payments across iPhone, iPad, Mac, and Apple Watch, Apple gains clearer recurring revenue and a built-in upgrade cadence. For buyers, the pitch is a single, lower monthly number instead of a painful one-time outlay — especially as retail prices creep higher across the lineup.
Existing iPhone Upgrade Program customers aren’t being cut off mid-stream. They can keep paying down their current phones on the old terms; they just won’t be able to buy the next one that way. When it’s time for a new device, they’ll have to pick Apple Upgrade, Apple Card Monthly Installments, or a different carrier or bank financing plan.
What This Means
Apple Upgrade makes it cheaper to get in the door with a new iPhone, Mac, or Apple Watch, and Klarna’s structure means you’re not paying more than sticker price if you decide to keep the device at the end. For many people, that’s going to be an attractive, almost subscription-like way to stay current without chasing carrier promos.
But this is still a lease. You don’t own the hardware unless you buy it out, you’re locked out of some models and discounts, and switching away mid-term can be expensive. The requirement to start iPhone leases on one of the big three carriers will also make this a non-starter for prepaid and MVNO users who’ve moved on from the traditional carrier bundle.
If you upgrade often, treat your devices carefully, and already live in Apple’s ecosystem — especially with an Apple Card — Apple Upgrade could be the smoothest way to keep a fresh iPhone, iPad, Mac, or Apple Watch on your desk. If you’d rather buy once and walk away, the retirement of the iPhone Upgrade Program is a reminder to pay close attention to the fine print before you sign your next Apple contract.
