Apple is reportedly set to introduce a hardware subscription service as soon as July 28, bringing back a plan it had previously put on hold. The program, reportedly called Apple Upgrade, would include most iPhone, Mac, iPad, and Apple Watch models.
According to Bloomberg, Apple is working with Klarna to power the subscription service, allowing the company to offer hardware through a lease-style model without assuming the financial risk. The partnership builds on an existing relationship that began when Apple added Klarna as a buy now, pay later option in Apple Pay in 2024.
Apple previously considered launching a device subscription service but abandoned the project in 2024 over reported concerns about financial oversight. Partnering with Klarna appears to be the company’s solution to those challenges.
The Apple Upgrade program is expected to give customers multiple choices over the life of the lease. Subscribers will reportedly be able to switch to a newer device, purchase the device when the lease ends, or return it. Early buyouts will also be allowed, although some options may carry additional fees. Lease terms are expected to be 24 months for iPhones and Apple Watches, and 36 months for iPads and Macs. Approval will require a soft credit check.
The service is also expected to include several restrictions. Bloomberg reports that AppleCare will not be available through Apple Upgrade, while devices such as the iPhone 16, MacBook Neo, Apple Watch SE, and the entry-level iPad will be excluded. Apple is also reportedly considering ending new enrollments in its current iPhone Upgrade Program and traditional financing plans.
The service is expected to launch first in the United States. Apple has not indicated whether it plans to expand Apple Upgrade to other markets.
The planned launch also comes as Apple raises prices across much of its hardware lineup. Many products recently became at least $100 more expensive, while the M3 Ultra Mac Studio saw a price increase of up to $1,300. Additional iPhone price increases are widely expected when Apple unveils its next generation of devices in the coming weeks.
Monthly payments could make Apple’s higher-priced devices more accessible to customers while helping the company maintain sales. The subscription would also create another source of recurring revenue, similar to its growing services business. At the same time, the program may carry the same risks as other buy now, pay later models, including extra fees for missed payments.
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