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Buying a new smartphone comes with lots of decisions. iPhone Pro or iPhone Air? “Cosmic Orange” or “Deep Blue”? Now there’s a new consideration to add to the list: buy or rent? Yesterday, Apple announced a new monthly lease program, which will allow prospective buyers to rent new electronics such as iPhones, MacBooks, iPads, and Apple Watches via an agreement with Klarna, the same company that facilitates monthly payments for $4 polyester underthings on Shein.
Perhaps you already make monthly payments for your iPhone. Since 2015, Apple has offered an “iPhone Upgrade Program” that similarly offers customers the option to pay off the device over time instead of in one lump sum. But under that arrangement, the monthly payments were not a lease but rather installments of a loan. Failing to pay your bill might have hurt your credit and eventually led to aggravated calls from a collections agency, but your phone was your phone, with all the candy you could crush.
Not anymore. The Klarna plan—“Apple Upgrade,” which replaces the iPhone Upgrade Program—is truly, legally, a lease. This is confusing! And it’s confusing in part because this is not how Klarna, a well-known buy-now, pay-later service, typically operates: When you use Klarna for clothing from Shein or lip kits at Sephora or an Xbox at GameStop, you’re paying back a loan, exactly as you were in the original iPhone Upgrade Program. Same if you use Klarna to buy a Samsung Galaxy phone. But with Apple Upgrade, you are renting: The Mac or Apple Watch is not yours until the final payment is made.
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There’s nothing wrong with flexibility, and leasing models exist for many expensive items—cars, grand pianos, apartments. Not everyone wants or needs to own property. Many people would rather have a high-end device at an affordable monthly cost rather than pay for one outright; all the better that they can upgrade to a new model before they’ve even finished paying off the entire cost.
But Apple products are particularly personal things. They’re communication devices that hold your intimate photos and videos, health data, and so forth. A rental model puts consumers in the strange position of storing all of this information in a gadget that Apple and Klarna maintain a lot of control over. Missing three consecutive payments with Klarna will obligate you to return the device or pay off the entire balance immediately. It is also theoretically possible that Apple or Klarna could eventually restrict access to various features if lease payments are missed; 9to5Mac has reported that code for such restrictions is present in a beta version of the upcoming iOS 27. When I reached Apple for comment, the spokesperson Brian Bumbery said that “there will be no restrictions or changes to functionality due to missed payments,” though why iOS 27 includes these options remains unclear . (Klarna did not respond to a request for comment.)
The shift to renting versus owning is also symbolic of darker currents in the tech industry. Thanks to a shortage of memory chips produced by the profoundly resource-hungry and inefficient AI industry, consumer electronics are becoming much more expensive across the board. Last month, Apple raised prices on many of its devices, citing the increasing cost of memory. The new upgrade program will make Apple’s electronics look more affordable than they really are.
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Consider a student or a young professional, or perhaps an underemployed older one, who needs a new laptop. They decide on a MacBook. Apple Upgrade will appear to be the best deal: In its announcement , Apple offers the example of a 14-inch MacBook Pro that retails for $1,999 but that can be had for a monthly lease. Perhaps this person goes for the two-year term, which has them paying $54 a month. Best Buy, which currently has the same computer on sale for $1,849, offers an 18-month loan repayment with $103 installments. Apple’s deal appears to be cheaper: The 24-month lease adds up to $1,296; Best Buy’s 18-month loan lands at the store’s full retail price of $1,849.
Why does Best Buy’s laptop seem more expensive? It’s because the plan is actually designed for you to fully pay off the device. At the end of the 24-month MacBook Pro lease, meanwhile, the consumer will still owe $703, meaning that the actual total price of the Apple arrangement is $1,999—higher than Best Buy’s offer. A person can choose to pay off the full amount, return the device outright, or swap for a new one. This is a lot of money, and so the likelihood is that this customer will just go ahead and do the trade-in, restarting a cycle in which they are bleeding their bank accounts to pay for a device they do not own and possibly will never own. And on it goes, in perpetuity.
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Apple, which reached a market value of more than $5 trillion , its highest ever, the same day it announced Apple Upgrade, has produced a scheme that will eke out more money from its customers than it did before. (Notably, the new plan does not include AppleCare+, as the previous iPhone Upgrade Program did, so consumers will have to add the cost of the warranty or risk having to continue paying the rental fee on a device that they lose or break.) All of this can feel cynical, but of course many technology companies are attempting some version of the same premise: At this point, I pay monthly or annual subscription fees to Apple, Google, Anthropic, Amazon, Sony, and Nintendo for services layered on top of products that once took far less from me. Doing so grants me access to cloud storage and advanced features that would now be difficult to separate myself from. I walked into the trap myself—even saw it coming—but I am nonetheless ensnared.
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