Apple’s new leasing plan for many of its primary consumer devices is aimed at making the products more affordable after the technology giant boosted prices for some of its products, CEO Tim Cook said Thursday.
The U.S. leasing program, announced Tuesday, applies to some models of Apple’s iPhones, watches, tablets and computers and will be operated by Klarna Group, the buy now, pay later company.
The program with Klarna is “a way to get into a product on a fairly affordable basis, particularly for those customers who want to upgrade on some kind of schedule,” Cook said on the company’s quarterly earnings call. “We'll see what the customer uptake is, but the early feedback on it is quite positive.”
The program offers one and two-year leases for Apple’s phones and watches and two or three-year leases for tablets and computers. An iPhone lease starts at $17.99 per month.
Under the program, Klarna said it will finance the purchase and earn a return from the scheduled repayments, although it did not offer financial details. Klarna shares specific terms of a lease with each customer at sign-up, a Klarna spokesperson said Friday. Apple’s site says monthly lease payments carry no fees.
Klarna said it can sell Apple customer receivables into its loan “offloading programs,” as it does with other consumer financing products. “We expect the program to positively contribute to Klarna's adjusted operating income in 2026 and across the life of the arrangement,” Klarna said in its investor statement.
The leasing program replaces Apple’s prior iPhone upgrade program with Citizens Bank and a separate phone financing plan that Apple offered.
Apple is keeping its current installment payment option for purchases made with its Apple Card. That card, which Apple is transitioning from Goldman Sachs to JPMorgan Chase over the next two years, offers zero interest for certain Apple product purchases.
Apple is introducing the leasing program as it commands higher prices for many of its products. Last month, the company hiked prices by $100 to $300 on most of its iPad tablets and MacBook laptops and more than $1,000 for some of its Mac Studio computers. Apple did not raise iPhone prices ahead of new models expected in September.
The company has linked the price increases to what Cook on Thursday called “exponential increases in memory (chip) prices.” The tech industry has been beset by higher memory chip prices amid the boom in artificial intelligence data center expansion.
The leasing program also arrives ahead of Apple’s major new phone release – including the company’s first foldable iPhone – in September, according to media reports. That device, known as the iPhone Ultra, is expected to cost about $2,000, Bloomberg News reported last month, citing people familiar with the product.
Apple’s new iPhone lineup gives the company an opportunity to increase its phone prices, TD Securities analyst Krish Sankar wrote Friday in a note to clients. “We believe this can be accomplished without significant demand destruction via the new Apple Upgrade program,” he wrote.
For Klarna, the Apple program creates “a direct relationship with new U.S. consumers that supports Klarna’s ability to grow” user engagement, revenue per customer and profits, the buy now, pay later company said Tuesday in an investor statement.
Apple explored starting a subscription service for its consumer devices as long as four years ago, Bloomberg News reported in March 2022, but ultimately shuttered that effort in late 2024.
