Apple might be about to change one of the pillars of its business. According to Bloomberg, the company will launch Apple Upgrade, a program that will allow access to an iPhone, Mac, iPad, or Apple Watch through a monthly fee, in a model similar to enterprise leasing. The initiative would start on July 28 in the United States and represents a new step in Apple’s strategy to turn hardware into a recurring service.
The key points of Apple Upgrade in 20 seconds
- Apple is preparing a leasing program for iPhone, Mac, iPad, and Apple Watch.
- Customers will be able to renew, return, or buy the device at the end of the contract.
- Klarna will handle financing and credit assessment.
- The model aims to lower the entry barrier to increasingly expensive devices.
- Apple would thereby strengthen its recurring revenue strategy beyond digital services.
For years, Apple has built one of the most profitable hardware businesses in the tech sector through the direct sale of premium devices. However, the continuous rise in device prices and the maturity of the smartphone market are pushing manufacturers to explore new ways to keep pace with renewal cycles.
Apple Upgrade directly responds to this context.
Instead of paying the full price of the device or financing its purchase through traditional installments, users would pay for using the device over a defined period. At the end of the contract, they could return it, exchange it for a newer model, or outright purchase it by paying the residual value.
From the iPhone Upgrade Program to hardware as a service
Apple has had the iPhone Upgrade Program for years, allowing users to upgrade their phone every twelve months in certain markets.
The difference is that Apple Upgrade would expand this concept to all of the company’s devices and modify the financial model itself.
According to Bloomberg, contracts would last 24 months for iPhone and Apple Watch, while Mac and iPad would be offered through 36-month agreements.
The program would be managed by Klarna, which would conduct credit assessments and manage monthly payments.
This operation resembles much more a tech rental than conventional financing.
During the contract, Apple would remain the owner of the device, allowing it to recover, refurbish, and re-market it within its renewed product program.
A move driven by rising hardware costs
Although Apple has not officially explained the reasons behind this project, market context helps understand the change.
In recent years, costs for components like DRAM memory, NAND storage, or advanced encapsulations have increased significantly.
At the same time, artificial intelligence is increasing memory and processing capacity demands on new devices.
Various analysts expect upcoming generations of iPhones, Macs, and iPads to continue a price upward trend due to higher manufacturing costs.
In this scenario, lowering the monthly fee could be more attractive for many consumers than facing a purchase exceeding €1,000 or even €2,000.
This way, Apple sustains its premium positioning without resorting to discounts that could erode the brand’s value.
More recurring revenue and better control of the renewal cycle
Apple has been shifting its business towards a model based on recurring revenue for years.
Services like Apple Music, iCloud+, Apple TV+, Fitness+, or Apple One generate steady monthly payments that reduce dependence on hardware launch cycles.
Apple Upgrade would transfer that same philosophy to its devices themselves.
From a business perspective, this system offers several advantages.
It allows for better forecasts of future income, encourages customers to upgrade their devices more frequently, and ensures a steady flow of devices that can be refurbished and resold.
Additionally, the manufacturer maintains ongoing relationships with customers throughout the device’s lifespan, instead of just at the point of purchase.
Also changing the competitive landscape
The initiative reflects a growing trend across the tech industry.
More manufacturers and operators are adopting subscription, rental, or “Device as a Service” (DaaS) models, especially in the enterprise segment.
For Apple, bringing this concept to the consumer market means competing not only with other hardware manufacturers but also with tech rental companies, mobile operators, and financial institutions.
The true appeal will depend on variables not yet known.
Apple has not announced monthly fees, residual values, applicable interest rates, or conditions for early renewal.
It’s also unclear whether AppleCare+ will be included in the price, though initial reports suggest it likely won’t be part of the standard fee.
Will it arrive in Europe?
For now, Apple Upgrade is only planned for the United States.
Its arrival in Europe will depend on each country’s financial regulations and agreements with collaborating institutions.
This isn’t the first time Apple adapts such programs to different markets.
If it eventually expands, it could significantly impact countries where tech rentals are already growing among both businesses and consumers.
It could also accelerate a broader market transformation: moving from outright device purchases to subscriptions.
At a time when smartphone and computer refresh cycles are slowing while prices continue to rise, turning hardware into a service could be an effective way to sustain demand without compromising the brand’s premium positioning.
It remains to be seen whether the total cost of the program will be truly competitive compared to traditional financing or whether, as with many leasing contracts, the convenience of a monthly fee will come at a higher overall cost in the long run.
Frequently Asked Questions
What is Apple Upgrade?
It’s a program that, according to Bloomberg, will allow users to use Apple devices through monthly payments in a leasing-like model, offering options to renew, return, or purchase the device at the end of the contract.
Which devices will be available?
Initially, it would include iPhone, Mac, iPad, and Apple Watch, although some specific models may be excluded according to available information.
Will this be a financed purchase?
Not exactly. Apple Upgrade resembles more a leasing or tech rental agreement than traditional financing, as ownership of the device does not automatically pass to the customer.
When will it launch?
Bloomberg indicates a launch on July 28 in the United States, but Apple has not yet made an official announcement.
