Apple Upgrade Replaces and Extends iPhone Upgrade Program

[ace (Adam Engst)]

Originally published at: https://tidbits.com/2026/07/28/apple-upgrade-replaces-and-extends-iphone-upgrade-program/

Apple has announced Apple Upgrade, a new program with the buy-now-pay-later company Klarna that lets US customers lease certain models of the iPhone, iPad, Apple Watch, or Mac for a monthly fee. Apple Upgrade replaces the iPhone Upgrade Program and the iPhone Payments installment plan. The 0% APR Apple Card Monthly Installments payment option remains available.

Basic Details

Customers can choose from 12- or 24-month leases for an iPhone or Apple Watch, or a 24- or 36-month lease for a Mac or iPad. Prices vary from $11.99 per month for a basic Apple Watch Series 11 to over $325 per month for a loaded Mac Studio. Longer leases have lower monthly fees but higher total costs. If you trade in a device when enrolling, that will lower your monthly costs, and if you use the Apple Card for the lease payments, you’ll get 3% cash back.

Not all products are included, so you can’t use Apple Upgrade to get an iPhone 16, iPhone 16 Plus, Apple Watch SE 3, MacBook Neo, Mac mini, iPad (A16), or Studio Display. I’m not surprised by the omission of the older iPhone 16 models, but why exclude the Apple Watch SE 3, MacBook Neo, Mac mini, base-level iPad, and Studio Display? My best guess is that Apple plans to refurbish and sell the devices returned from Apple Upgrade, but those products have lower resale values.

Nor is Apple Upgrade available for the Education, Government, or Veterans and Military Purchase Programs, Apple at Work for small businesses or enterprises, corporate Employee Purchase Programs, or the Apple Employee Purchase Plan.

If you’re leasing an iPhone, you must choose from AT&T, T-Mobile, or Verizon, and you can’t use a prepaid carrier plan (this is also true for the Apple Card Monthly Installments). That’s too bad, since if paying less is the goal, you can save significantly with a prepaid plan or an MVNO carrier like US Mobile or Consumer Cellular, as discussed in TidBITS Talk. That said, the iPhones leased through Apple Upgrade are unlocked, so you can switch among the eligible carriers.

iPhone Upgrade Program Comparison

Apple Upgrade works much like the now-defunct iPhone Upgrade Program, which also charged a monthly fee, but it’s different under the hood. The iPhone Upgrade Program was essentially an interest-free loan, whereas Apple Upgrade is a true lease. With the iPhone Upgrade Program, you could upgrade to the latest iPhone model for free after 12 payments, and after 24 payments, you owned the device outright. If you wanted to stop paying at any time, you could pay off the remaining balance and keep the iPhone.

With Apple Upgrade, you’re renting the device, and at the end of the lease, you must either return the device or purchase it with a one-time payment. You can also “upgrade to the latest generation,” but that mostly means Apple contacts you when the original lease ends and helps you start a new one. So it’s effectively the same as the iPhone Upgrade Program.

Apart from taxes and a fee if you return a damaged device, Apple says you won’t pay more than the full price of the device: “the purchase option fee is the list price minus any lease payments you’ve made minus any remaining discounts or trade-in credit.” If you want to stop paying, you can terminate your lease and return the device, but Klarna will charge you “substantial fees,” presumably the remaining lease amount. If you do nothing at the end of the lease, it automatically converts to a month-to-month lease for up to 6 months, possibly with higher monthly payments. If you take no action at the end of the 6-month extension, Klarna will charge you the purchase fee.

Also, the iPhone Upgrade Program included AppleCare, whereas Apple Upgrade does not. It’s available, of course, but it will significantly increase the monthly costs. We generally recommend AppleCare for iPhones, as well as iPads and MacBooks that are regularly used on the go. If you don’t purchase AppleCare+ Theft and Loss for your iPhone, iPad, or Apple Watch, and it is lost or stolen, you’ll have to pay the early termination or purchase fee.

People currently enrolled in the iPhone Upgrade Program will have the option to lease a new device with Apple Upgrade, finance with Apple Card Monthly Installments, purchase the product outright, or choose carrier financing. Hopefully, Apple will make the transition clear.

Should You Lease Through Apple Upgrade?

Although the appeal of Apple Upgrade is obvious—less cash needed up front for an Apple device—I’m unenthused about Apple Upgrade. The only way it improves on the iPhone Upgrade Program is by including other products. The simplicity, carrier flexibility, and end-of-term ownership of the iPhone Upgrade Program and outright purchases seem better than Apple Upgrade’s voluminous fine print and administrative overhead.

Outright purchases are easy: order the new iPhone, activate it on your number when it arrives, and return your old iPhone in the packaging Apple provides within 14 days. It feels like there’s more that could go wrong with terminating and restarting Apple Upgrade leases. What if you forget to unfreeze a credit report when an upgrade happens, or your credit card is compromised while you’re traveling, causing a payment to fail?

There was initially another worry. 9to5Mac reported that code in the iOS 27 beta suggests that Apple could restrict leased devices if customers fall behind on payments. However, Apple told The Verge that, “There will be no restricted mode and/or there will be no limitations put on device functionality due to missed payments or default with the Apple Upgrade program.” It’s unclear what the “App Managed Features” system is for—perhaps other markets?—or whether Apple has backed down from it amid negative press.

Again, the attraction of Apple Upgrade is the ability to pay a small monthly fee rather than a large upfront price. As long as you’re aware of all the administrative details involving missed payments, early termination, returning devices, and more, it might be a good way to spread out the cost of an expensive Apple device.

[Simon]

@ace

Oh, and if you’re leasing an iPhone, you must choose from AT&T, T-Mobile, or Verizon, and you can’t use a prepaid carrier plan. That’s too bad

Indeed it is. So: no thanks, Apple.
(same is unfortunately also true for the 12/24-month interest-free financing option through Apple Card)

Also, at least in my experience, Apple trade-in stinks. Instead, I’ve used both SellYourMac and Back Market, and both have worked great for me. I choose either of those now based purely on whoever makes me the higher offer.

[jlfish]

I’m guessing the answer to “Is it worth it?” will be YMMV.

I can’t see it being a benefit for Mac hardware — for me — because I tend to purchase with 0% financing and keep a computer for anywhere from 3 to 7 years. Watch? Highly doubtful — I have an Ultra 2 and have yet to see anything that makes it worth upgrading (I keep thinking of Dennis Miller’s joke about watching “Gone With the Wind” on a screen the size of a half dollar).

A phone? Maybe. I don’t buy into the “free” phones — they’re not, and it’s a long lock-in). I tend to skip maybe every third model, looking for that sweet spot when my trade is worth a good amount and — again — a good 0% offer. If it’s a monthly payment and I’m not paying interest or fees, who cares whether it’s to Apple/Klarna or on another card?

[Valis]

I’ve been on the IUP practically since it began but I’ve always used it with a prepaid cell plan, so now I’m ineligible for this new Upgrade plan. IUP was a very convenient way to have the best camera every year, in a device protected against loss or damage, with which I could completely ignore best battery practices knowing anything I did to it would last a year, and getting a $1400 device at 0% interest.

Now however, when the next iPhone Pro Max comes out I’ll probably end up paying off my remaining months in the IUP (the battery has taken enough of a hit that I don’t want to have to baby it for another year) then trading it in for a new model.

[MyBlueSky (Scott D.)]

No, purchasing the phone at the end of the lease is not subject to an “unspecified” payment. As the FAQ at Apple Upgrade - Lease iPhone, Mac, iPad, Watch - Apple says:

“If you decide to buy the device, the purchase option fee is the list price minus any lease payments you’ve made”

[MyBlueSky (Scott D.)]

Adam, the new program is nowhere near as customer hostile as your write-up makes it out to be. If you read everything they’ve posted (most of it significantly larger than the small print), you’ll see that you’d never end up paying a total greater than the phone’s list price – regardless of ending the lease early, letting it run past the term, wanting to purchase the phone outright and keep it, or just about any other scenario that could happen.

[ace (Adam Engst)]

Fair point—the FAQ was so far down on that page that I never saw it while writing, and it contains information that Apple probably should have put in the announcement and fine print. I’ll recast that bit.

I’m still inherently dubious of the program because the restriction switch Apple has apparently built into iOS 27 and Klarna being a BNPL company. Even if the costs end up being the same, I’m not a fan of subjecting myself to extra administrative overhead where something could go wrong and require untangling with Klarna.

[ShermanWilcox]

Now however, when the next iPhone Pro Max comes out I’ll probably end up paying off my remaining months in the IUP (the battery has taken enough of a hit that I don’t want to have to baby it for another year) then trading it in for a new model.

I’m in the same boat. I was already thinking I would drop out of the IUP, and now this Klarna plan seals the deal. I’m unclear what will happen, though. Will I be able to pay off my current Citizen One loan (I’m almost one year into it), and then trade in my 17 on whatever I decide to buy? (Of course, I realize the other option is probably to stay in and pay off in the full 24 months.)

[silbey]

If it plays out as advertised, it seems pretty reasonable.

[xdev (Marc Z)]

@ace

I’m still inherently dubious of the program because the restriction switch Apple has apparently built into iOS 27

Apparently Apple has stated that switch won’t be used for missed lease payments:

No, Apple won’t turn on any ‘restricted mode’ for missed lease payments

[aforkosh (Alan Forkosh)]

I’ve been on the IUP since the beginning, getting a new phone each year, thus restarting the loan. Last year was the first time I was able to get the new phone in an Apple Store. The store employee actually ran a check to see if it made sense to pay off the loan and trade the old phone in. It didn’t, but it was a close call.

Assuming I decide to get a new phone this year, I will not use the new Apple upgrade program. I will either pay the full cost of the new phone or put it on the Apple Installment Plan on my Apple Card. I will pay off the loan on the old iPhone and then either trade it in, sell it via a third-party program like Sell Your Mac, or sell it to an acquaintance for near the best price on Sell Your Mac or the Apple Trade-In value.

Note that computing the amount of loan remaining is a bit tricky. The loan also includes AppleCare, so you need to subtract the cost of AppleCare from the monthly payment on the loan to determine how much you have paid. Although the loan covers AppleCare for the full term, when you turn the phone in, the AppleCare should also stop with a rebate for any unused portion. You may need to do that on your own, but in the end, the calculation comes down to the value of the phone vs. the loan payments you have made for the phone.

[xdev (Marc Z)]

@MyBlueSky

Adam, the new program is nowhere near as customer hostile as your write-up makes it out to be

The new program, because you’re not paying the full phone cost unless you buy it in the end, means lower monthly payments. That sounds good to me – I’ve gotten a new iPhone on the iPhone Upgrade Program every year for years now – so I was renting it at a higher cost. My payments under this new program will be much cheaper (more than enough to compensate for any potential iPhone price increases in the fall).

In other words, if you were already treating the iPhone Upgrade Program as a lease and never “owning” the phone, the new program is better. If you were wanting to just have monthly installments, the new program is good for that, only slightly more complicated at the end of the term.

The only two drawbacks I see is that you need to decide in advance if you want 12 or 24 payments for a phone (if you picked 24 and then decided to upgrade after a year, I think you’d have to pay off the 2nd set of 12 payments in order to trade it in), and the new program doesn’t include AppleCare+, which is another cost.

However, for the latter, if you’re one AppleCare One, you should be able to add a phone for a low cost.

[xdev (Marc Z)]

the iPhones leased through Apple Upgrade are unlocked, so you can switch among the eligible carriers

This from the article confuses me a bit: you can’t sign up for the program unless you’re already with a major carrier, but you can then switch afterward? Or do you just have to pick a carrier during “purchase” but not necessarily have an active plan through them? How long do you have to “stay” with that carrier before you can switch to a prepaid plan with the unlocked phone?

[Simon]

@xdev

In other words, if you were already treating the iPhone Upgrade Program as a lease and never “owning” the phone, the new program is better.

I’m not sure that’s always true. The difficulty I see is that the previous program included AppleCare+ so if you handed back your leased device damaged, you’d at worst be stuck with a minor AC+ fee. But now there is now AC+ requirement so if you damage the device, Klarna will make you pay for the damage. I would imagine that could be considerably more than AC+ flat fee. Also, rather than Apple assessing (and fixing) damage, now you’ll be at the mercy of a BNPL company with an at least questionable reputation. Obviously, you can still get AC+ to insure against that, but that is now an extra expense you have to sign up for independently.

[aforkosh (Alan Forkosh)]

@Simon

Obviously, you can still get AC+ to insure against that, but that is now an extra expense yu have to sig up for independently.

But if you own enough expensive devices that AppleCare One makes sense, the AppleCare cost will be cheaper than the AppleCare part of the iPhone Upgrade payment.

[Simon]

@xdev

you can’t sign up for the program unless you’re already with a major carrier, but you can then switch afterward? Or do you just have to pick a carrier during “purchase” but not necessarily have an active plan through them? How long do you have to “stay” with that carrier before you can switch to a prepaid plan with the unlocked phone?

I just asked about that. Apple support rep said there is no restriction to the carrier. The phone is unlocked and terminating the plan with the initial carrier does not automatically end the lease.

[ace (Adam Engst)]

@xdev

Apparently Apple has stated that switch won’t be used for missed lease payments:

No, Apple won’t turn on any ‘restricted mode’ for missed lease payments

That’s good news, and I’ve tweaked the article again. But the mere fact that there’s all this confusion about the details, leading everyone to try to figure it out and prompting Apple to issue clarifying statements, suggests to me there will be gotchas.

I’m sure it will be fine for most people, most of the time. But when it does go wrong, as it inevitably will for someone, it feels to me as though there’s room for things to go spectacularly wrong. For instance, what if there’s a connection to the user’s Apple Account and if the person fails to pay Klarna and gets sent to a collection agency, does that affect their Apple Account too?

@xdev

In other words, if you were already treating the iPhone Upgrade Program as a lease and never “owning” the phone, the new program is better.

The thing I’ve never been able to wrap my head around with all these plans is that they’re like musical chairs. As long as the music keeps playing, you’re fine. But at some point, you’re going to want to stop (or at least take a break), and it’s hard to imagine that scenario.

[silbey]

@ace

suggests to me there will be gotchas

The absence of gotchas is evidence that there will be gotchas? I’m not sure I follow that.

@ace

For instance, what if there’s a connection to the user’s Apple Account and if the person fails to pay Klarna and gets sent to a collection agency, does that affect their Apple Account too?

What happened when you stopped making payments in the iPhone Upgrade program and Citizens Bank sent you to a collection agency?

@ace

As long as the music keeps playing, you’re fine

As always with these things, put the full amount of the phone in a interest bearing account, make monthly payments from that, and at the end pay it off with the remainder and keep the interest.

[xdev (Marc Z)]

@ace

But the mere fact that there’s all this confusion about the details, leading everyone to try to figure it out and prompting Apple to issue clarifying statements, suggests to me there will be gotchas.

Well, this particular case was someone seeing code in a pre-release OS and interpreting to mean a certain thing… not exactly a confusing “detail.” Most people would never know about that gotcha and it wouldn’t have needed Apple to clear it up.

This is also a brand new program and the terms are barely available yet, so we’ll see how it plays out in real life. For instance, I have questions about how it works with AppleCare+ and AppleCare One. There’s also the confusion about having to have a “big 3” carrier at purchase but apparently you can switch later to a different carrier as the phone is unlocked.

All that said, there are always subtle details in contracts and I expect some people will be “shocked” at the end of their payment term to discover there’s a balloon payment due. No matter how clear Apple makes that, a few people won’t absorb that info and will be unpleasantly surprised.

Is that a reason to not do this program? I don’t think so. I wouldn’t necessarily recommend it to everyone, and especially not for devices like MacBooks that most people want to eventually own and keep for 5 or 6 years.

But for some people who couldn’t afford it any other way, or for people like me that like automatically getting a new phone every year, having small fixed monthly payments and always having the latest phone is a pretty sweet deal. I certainly will prefer the smaller payments, especially if iPhone prices go up this fall. (When I started the iPhone Upgrade my payments were about $35/month for the top iPhone. Now they’re $61. I think they’ll be closer to $50 in the new program.)

[bhupesh]

I’m in the market for a high end MacBook Pro. I’ll keep it for up to 10 years. I could use the Apple Card 12 months no interest, but that’ll cost me $550/mo. On this program it’s $190 for 24 months, which I can stretch to 30 months. it’ll then cost me $750 to own it. That’s 30 months at no interest. With a small payment at the end. Sounds like a pretty good deal to me.