Apple plans to lease iPhones for $17.99 a month through partnership with Klarna

Apple is changing how customers acquire hardware in the United States. Starting soon, the company will offer a new leasing program in partnership with Klarna that allows users to rent iPhones for a monthly fee starting at $17.99.

This initiative, known as Upgrade, applies to physical retail locations and the online store. The program is not limited to phones. Customers can also select leasing terms for iPads, Macs, and the Apple Watch. The company is shifting its business model to focus on these monthly payments as hardware costs rise due to manufacturing pressures.

The new deal replaces the previous iPhone Upgrade Program, which relied on financing from Citizens Bank. Under the new system, users sign a contract for one or two years. At the end of the term, they return the device, buy it outright, or trade it in for a newer model. No security deposit is required, though the firm will end leases if payments are missed for three consecutive months.

This move comes as analysts observe a longer replacement cycle for mobile devices. By lowering the entry cost through monthly leases, Apple intends to keep its customer base active. The timing of this announcement aligns with recent price hikes for several products, helping the company manage hardware costs without discouraging buyers with high upfront costs.