Apple doesn’t seem interested in making its expensive devices cheaper. Instead, it may make the price easier to ignore.
The company plans to launch Apple Upgrade, a Klarna-backed leasing program for multiple iPhones, iPads, Macs and Apple Watches, on July 28 in the US, according to a Bloomberg report.
The reported lease comes less than a month after Apple raised prices across its entire hardware lineup, citing a global shortage of memory and storage chips. The MacBook Air jumps from $1,099 to $1,299, while the iPad Air goes from $599 to $749.
Apple doesn’t fare well in a bad quarter, either. In its latest earnings release, the company called it its “best March quarter yet,” reporting $111.2 billion in revenue for the three months ended March 28, up 17% from a year ago. It also posted about $29.6 billion in revenue during the same period, according to Apple’s financial statements.
That makes Apple Upgrade look less like a lifeline for a struggling company and more like a way to protect sales without reversing those price increases. A $1,299 MacBook Air is still a $1,299 MacBook Air, but framing it as three years of payments makes the price easier to swallow.
That strategy may be particularly effective at a time when many Americans are borrowing and using credit to buy, and most households don’t have much cash to fall back on. Applications for new credit reached their highest level in nearly five years in June, according to the Federal Reserve Bank of New York. A separate Federal Reserve survey found that 37% of adults would need to borrow money or sell something to cover a $400 emergency expense.
That’s the trick of buying now, paying later — you don’t have to buy the item, just the down payment.
A low fee is not a low price
The Apple Upgrade will work more like a car lease than the company’s current financing options. Customers can upgrade early, return the device at the end of the contract, or pay the remaining balance to keep it. Some of those decisions may carry additional fees.
Reported lease terms are 24 months for iPhones and Apple Watches and 36 months for Macs and iPads. Enrollment will require a soft credit check, and the program will be offered through Apple’s website and retail stores.
Apple plans to market the program around low monthly payments. But the lower price does not make the device cheaper. Customers who return it pay for temporary use, while those who want to keep it will still owe the remaining amount.
There’s also a catch – AppleCare will reportedly not be included.
Apple’s current iPhone Upgrade program spreads the combined cost of the iPhone and AppleCare Plus for Theft and Loss over 24 interest-free payments. Customers can upgrade after making the equivalent of 12 payments and trades in their current phone.
Apple reportedly plans to stop accepting new registrations for that program and its regular iPhone support when the Apple Upgrade is introduced. Customers who want coverage may need to purchase AppleCare separately, so that the advertised fee does not reflect their monthly costs.
And not all devices may be suitable either. The iPhone 16, Apple Watch SE, entry-level iPad and MacBook Neo are reportedly not included, along with business and education purchases. That means lower program fees will primarily help Apple sell its more expensive hardware, not make its cheaper products more affordable.
Apple has not officially announced the plan. CNET has contacted Apple and Klarna for comment.
