CUPERTINO, Calif., July 29 (San Francisco News Online) — Apple Inc. (Nasdaq: AAPL) said it is changing how U.S. customers can pay for some of its products. The company announced Apple Upgrade, a leasing program backed by Klarna that covers eligible iPhone, iPad, Mac and Apple Watch devices.
The move gives Apple customers another way to get a new device without paying the full price up front. It also ends two older payment options in the United States: the iPhone Upgrade Program and iPhone Payments.
How Apple Upgrade works
A lease lets a customer use a device for a set period in exchange for monthly payments. Apple said Apple Upgrade offers 12- and 24-month lease terms for iPhone and Apple Watch, and 24- and 36-month terms for Mac and iPad.
Apple said monthly prices start at $17.99 for iPhone, $11.99 for Apple Watch, $24.99 for Mac and $11.99 for iPad.
Customers can also lower their monthly payment by trading in an existing device through Apple Trade In when they first enroll, Apple said.
At the end of the lease, customers can return the device, buy it with a one-time payment, or move to a newer model, according to Reuters’ report on Apple’s launch.
Where it is available
Apple said Apple Upgrade is available in the United States through Apple Store online, the Apple Store app and Apple Store locations.
Klarna said it is the financing company behind the program.
What changes for current Apple customers
Apple said current members of the iPhone Upgrade Program can, when eligible, choose to lease a new device through Apple Upgrade, finance with Apple Card Monthly Installments, buy the device outright or use carrier financing.
That matters because it gives existing users a path into the new program instead of forcing them into one option only.
Reuters reported that Apple said applicants will go through a soft credit check by Klarna that will not affect their credit score. That makes the program different from a standard loan, where the lender may make a harder credit inquiry.
Why Apple is making the change
For customers, the appeal is simple: lower monthly payments and less money due at the start.
For Apple, the lease program may make its devices easier to buy for people who want the newest model but do not want to pay full price at once. Apple did not say how many customers it expects to use Apple Upgrade or what financial effect it expects from the change.
The launch also marks a shift in Apple’s payment setup in the United States. By ending the iPhone Upgrade Program and iPhone Payments, Apple is moving more customers toward a leasing model instead of its older financing options.
Apple and Klarna did not disclose the full commercial terms of their arrangement in the launch materials.
In plain terms, Apple Upgrade is a new way to rent, and possibly later buy, an Apple device. It gives U.S. customers another payment choice, while giving Apple a new tool to keep buyers inside its product cycle.
