Apple is working with Klarna on a new hardware rental program called Apple Upgrade, according to Bloomberg. The plan would turn some higher-priced Apple devices into monthly subscription-style offerings instead of one-time purchases.
24-month and 36-month terms depending on the device
The program is designed around different replacement cycles. iPhone and Apple Watch models would carry 24-month terms, while Mac and iPad devices would be offered on 36-month terms because of their higher prices and longer usable life.
Customers would pay a fixed monthly device fee during the contract period. When the term ends, they could return the device and upgrade to a newer model, or make a final payment to keep it. The report also says the program would include options for early upgrades or early payoff.
Not available for entry-level products, and warranty is separate
Apple Upgrade is not expected to cover the full product range. Apple is said to be excluding entry-level devices as it tries to support sales of higher-end models. Products and purchase channels currently listed as unavailable include iPhone 16, the new MacBook Neo, Apple Watch SE, entry-level iPad models, and purchases made through corporate and education programs.
The new plan would also differ from Apple’s older iPhone upgrade offering. Instead of bundling accidental damage coverage, Apple Upgrade would only cover the hardware rental itself. Customers who want that protection would need to buy AppleCare+ separately.
Apple had planned a similar service in 2024
The report links the timing to rising supply-chain costs. Apple has already raised prices on some Mac and iPad products, and a monthly payment structure through Klarna could make those devices feel more affordable at the point of sale.
Apple had planned to launch its own hardware subscription service in 2024, but that effort was later shelved. This time, it is turning to Klarna, whose buy now, pay later business and global operating experience are central to the arrangement. The report says Klarna’s AI-based risk assessment capabilities were part of the appeal, while the partnership would also leave Apple less exposed to consumer finance and default risk.
US launch expected first
Apple Upgrade is expected to debut in the United States through Apple retail stores and the company’s online storefront. Applications would reportedly be handled with a soft credit check that does not affect a customer’s credit score.
As described by ABMedia, the program points to Apple’s broader push to move subscription logic from software into hardware, turning device access into an ongoing monthly relationship rather than a single purchase.