Apple Launches Product Leasing Program With Klarna

Apple launched a new product leasing program called Apple Upgrade on Tuesday, enabling U.S. customers to acquire select Apple devices through monthly installment payments. This initiative is a partnership with the "buy now, pay later" service Klarna. The program allows consumers to lease iPhones, Apple Watches, Macs, and iPads online through the Apple Store, the Apple Store app, and in physical Apple Store locations. Leasing options vary by product, with one- and two-year terms available for iPhones and Apple Watches, and two- and three-year terms for Macs and iPads. Pricing for iPhone leases starts as low as $17.99 per month, with Apple Watches at $11.99 per month, Macs at $24.99 per month, and iPads at $11.99 per month, depending on the specific model chosen. However, certain popular models are excluded from the Apple Upgrade program. These exclusions include the iPhone 16, iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, iPad (A16), and the Studio Display. Customers can reduce their monthly lease payments by trading in their existing devices through the Apple Trade In program. Additionally, users who make their lease payments using the Apple Card, a credit card co-branded with Mastercard, can earn 3% Daily Cash back on their payments. The application process for Apple Upgrade involves a "soft credit inquiry" that takes a few minutes and is designed not to impact a customer's credit score. Once approved, customers can select their desired leasing option. The introduction of this leasing program saw a nearly 1% increase in Apple Inc. (Nasdaq: AAPL) shares and a 2% increase in Klarna shares (Nasdaq: KLAR) in midday trading on Tuesday. Karen Rasmussen, Apple's vice president of the Apple Store online, stated that the program "offers our customers, both online and in-store, a more flexible way to pay for the products they love," emphasizing Apple's customer-centric approach. This move by Apple signifies a strategic effort to increase product accessibility and potentially boost sales by offering more flexible payment structures, mirroring trends seen in other consumer electronics markets where leasing and subscription models are becoming more prevalent.