Apple Upgrade Replaces and Extends iPhone Upgrade Program

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Originally published at: Apple Upgrade Replaces and Extends iPhone Upgrade Program - TidBITS

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 Apple Employee Purchase Plan, corporate Employee Purchase Programs, Apple at Work for small businesses or enterprises, and Government, Education, or Veterans and Military Purchase Programs.

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, since if paying less is the goal, you can save significantly with a carrier like US Mobile or Consumer Cellular, as discussed in TidBITS Talk. The iPhones leased through Apple Upgrade are unlocked, so you can switch among the eligible carriers, though.

iPhone Upgrade Program Comparison

Apple Upgrade may sound like the now-defunct iPhone Upgrade Program, which also charged a monthly fee, but it’s quite different. 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, 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 an unspecified one-time payment. Apple says you can also “upgrade to the latest generation,” but that’s marketing-speak—a footnote clarifies that the original lease ends and you have to start a new one.

In fact, all the important details are in those fine print footnotes. If you want to stop paying, you can terminate your lease and return the device, but Apple will charge you “substantial fees.” 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, Apple 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.

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?

I’m skeptical about Apple Upgrade for several reasons. First, the only way it seems better than the iPhone Upgrade Program for customers is by including other products. For customers, the simplicity and end-of-term ownership of the iPhone Upgrade Program seem notably better than Apple Upgrade’s sneaky ways of charging more if you don’t stay on top of the lease termination.

Second, the iPhone Upgrade Program’s costs were nearly identical to the outright purchase price plus AppleCare, divided by 24 installments. Since you presumably want AppleCare, there was essentially no difference between the iPhone Upgrade Program and buying (and trading in) a new iPhone every year. With Apple Upgrade and added AppleCare, you’ll pay about the same, but you’ll never end up owning a device outright.

Of course, comparisons are moot, since Apple has canceled the iPhone Upgrade Program. Personally, I’ve always used outright purchases with trade-ins instead of the iPhone Upgrade Program because of an Apple website error that prevented me from signing up for it on iPhone ordering day some years ago. I don’t know exactly how Apple Upgrade will work, but 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 seems like there’s more that could go wrong with terminating and restarting leases.

Third, 9to5Mac reported that code in the iOS 27 beta suggests that Apple could restrict leased devices if customers fall behind on payments. Perhaps restricted access feels like an acceptable consequence for missed payments, but what happens when there’s an administrative error that isn’t your fault? The analogy isn’t clean, but we’re closing in on a point where hardware could be like DRM-encumbered media that can be rescinded remotely.

The main attraction of Apple Upgrade is being able to pay a small monthly fee rather than a large upfront price. As long as you’re aware of the restrictions 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. Or use Apple Card Monthly Installments, though those come with their own fine print.

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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.

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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?

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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.

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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”

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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.