Apple is launching a Klarna-backed device leasing program called Apple Upgrade on July 28

Apple is preparing to launch Apple Upgrade, a device leasing program backed by Klarna that will mark one of the biggest changes to how the company sells hardware, Bloomberg reported on Monday. The service is planned to go live on July 28 and will support most iPhone, Mac, iPad, and Apple Watch models, according to people familiar with the matter cited by Bloomberg. Apple declined to comment, and Klarna did not immediately respond to a request for comment.

The program works like a car lease. Customers can pay off the device early, upgrade to a new model before the term ends, or return the device when the lease is up, with some of those transactions carrying an additional fee. iPhone and Apple Watch leases will run for 24 months, while Mac and iPad terms will extend to 36 months, and users will need to pass a soft credit check to qualify.

Apple plans to discontinue new enrolments for its existing iPhone Upgrade Program and standard financing to make way for Apple Upgrade, Bloomberg reported. The company intends to advertise the new program as a way to lower monthly payments compared to current options. Unlike the iPhone Upgrade Program, Apple Upgrade does not include AppleCare, a notable omission given that Apple recently raised AppleCare+ prices as part of a broader wave of cost increases driven by the global memory chip shortage.

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Not every Apple product will be eligible. The Apple Watch SE, entry-level iPad, iPhone 16, and MacBook Neo are excluded from the program, according to Bloomberg. Business and education purchases are also not covered.

The launch comes weeks after Apple raised prices by hundreds of dollars across Macs, iPads, and other devices in response to an industrywide memory shortage that has driven component costs sharply higher. Apple is also widely expected to raise iPhone prices when new models arrive in September. By framing hardware as a monthly payment rather than an upfront cost, Apple Upgrade could soften the sticker shock at a moment when nearly every product in the lineup has become more expensive.

For Klarna, whose stock has fallen sharply since its September 2025 IPO, the partnership represents a major distribution win. The Swedish buy-now-pay-later company’s shares jumped as much as 11 percent on the news.

Apple had been developing an in-house hardware subscription service since at least 2022 but canceled the effort in late 2024 after running into software problems and regulatory concerns, according to earlier Bloomberg reporting. By partnering with Klarna instead, Apple gets the benefit of offering a leasing option without taking on the financial risk itself.