Apple Teams With Klarna to Launch ‘Apple Upgrade’ Leasing Program

Apple is rolling out a new device leasing program called Apple Upgrade, backed by Klarna, in what may be one of the biggest shifts to how the company sells hardware in years. The service is planned to launch July 28 and will support most iPhone, Mac, iPad and Apple Watch models, with Klarna acting as the financial backer.

How Apple Upgrade works

Apple Upgrade will work like a subscription, letting customers pay off a device early, upgrade early to a new model, or keep the product after the lease period, with some options carrying extra fees. Leases run 24 months for iPhones and Apple Watches, and 36 months for Macs and iPads, subject to a soft credit check.

At launch, the program will be available exclusively in the United States through both Apple’s retail stores and its website. Unlike the existing iPhone Upgrade Program, the new leasing agreements will not automatically include AppleCare, requiring customers to purchase coverage separately.

What is not covered

The Apple Watch SE, base model iPad, iPhone 16, and MacBook Neo won’t be eligible for Apple Upgrade. The service is strictly for consumer purchases, leaving out transactions made through Apple’s education and business channels.

Apple also plans to stop new enrollments in its current iPhone Upgrade Program and standard financing plans to make room for Apple Upgrade.

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Why Apple is doing this now

Apple Upgrade comes just a month after the company announced price hikes for Macs and iPads, and while iPhone and Apple Watch pricing was left unchanged, new versions expected in the fall could bring higher prices. The leasing structure is designed to keep monthly friction low even as sticker prices climb.

By teaming up with Klarna, Apple can offer lower monthly payments without taking the leases onto its own balance sheet. Apple had previously explored launching an in-house hardware subscription service but reportedly scrapped the effort in 2024.

Klarna reaction

Klarna shares jumped as much as 11% to $20.78 following the report before paring most of those gains, trading up 1.87% at $19.11 at publication. Keefe Bruyette maintained its Outperform rating and $26 price target on Klarna, saying the Apple partnership would strengthen Klarna’s position with U.S. merchants and deepen its presence in consumer financing.

Klarna’s next major catalyst is its second-quarter earnings report, scheduled for Aug. 18, 2026, with Wall Street expecting a loss of 7 cents per share on revenue of $991.82 million.

Options market and stocks to watch

AAPL: Watch for flow around the July 28 launch date and any read-through on how leasing could smooth iPhone upgrade cycles ahead of the fall product refresh.

KLAR: Watch for continued repricing into the Aug. 18 earnings print, with the Apple deal adding a new revenue channel.

AFRM and PYPL: Watch buy-now-pay-later peers for competitive pressure now that Klarna has locked in a marquee U.S. merchant.

SYF: Watch the incumbent consumer-financing name given Apple is phasing out standard financing enrollments in favor of the Klarna-backed program.

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