Apple launches upgrade leasing program with Klarna as partner

Matt Frankel, CFP®, The Motley Fool Wed, July 29, 2026 at 7:49 AM PDT | 3 min read

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Apple (NASDAQ: AAPL) officially launched its Apple Upgrade leasing program this week, allowing customers to pay monthly for iPhones, Apple Watches, Macs, and iPads. Payments start at $17.99 per month, giving customers the financial flexibility to upgrade their devices more frequently without making lump-sum payments.

To be clear, this could be a big deal for Apple. Leasing payments are significantly lower than the company's old upgrade program, so this could boost sales by encouraging customers to not only upgrade more frequently, but to lease higher-end devices than they would ordinarily buy outright.

Leases run 12–24 months for iPhone and Apple Watch products, and 24–36 months for Mac and iPad. Meanwhile, the average traded-in iPhone today is about 3.6 years old, according to Assurant data. This means customers could upgrade their iPhones twice as often as they do today, which could be a major boost to Apple's new device sales.

However, the biggest winner here might not be Apple, but the company running the leasing program.

Apple's Leasing Partner

Apple's new leasing partner is the buy-now, pay-later (BNPL) financing leader, Klarna (NYSE: KLAR).

Klarna is providing the financial infrastructure for the Apple Upgrade program. It will legally own the leased devices throughout the term, and at the end of the lease, customers can pay a residual fee to keep them, return them, or upgrade to the newest model. Klarna pays Apple for the device upfront and carries the receivable (lease obligation) on its balance sheet.

Klarna makes money from this partnership in two main ways:

• Merchant fees: Apple will pay merchant fees for Klarna providing the financing, just as with any BNPL transaction.
• Device resale: The company can also refurbish and resell any devices that get returned at the end of their lease.

These two income streams will be happening at an Apple-level scale.

The Bottom Line

Klarna isn't exactly a low-volume company as it is, but providing Apple's leasing infrastructure could be a big needle mover. It's tough to overstate the opportunity here. For context, Apple generated more than $200 billion in sales last year from the iPhone alone. Obviously, not all of this volume will move to Klarna's network, but a meaningful percentage of it could. And with two big ways the company could profit from this partnership — including one that won't show up in the numbers until leases start to mature — it could be a long-tailed revenue driver for the fintech.

Image source: Getty Images.