Apple Upgrade: Buy Now, Pay Later—But Never Truly Own
Apple Upgrade is a subscription-style leasing plan that uses Klarna’s buy-now-pay-later model to offer monthly phone payments for iPhones and other devices, making high upfront prices feel more affordable while quietly locking customers into long contracts, limited ownership rights, and the risk of lost access if payments go wrong. Starting July 28, customers can lease iPhones, iPads, Macs, and Apple Watches through monthly third-party payments, marking Apple’s full entry into the iPhone buy now pay later space. You lease an iPhone or Apple Watch for 24 months, or a Mac or iPad for 36 months, with options to pay off early, upgrade, or return the device at the end of the term. On paper, that flexibility looks consumer-friendly; in practice, it turns owning a phone into an ongoing financial commitment designed to benefit Apple and Klarna more than the people they say they are helping.
How Monthly Phone Payments Hide the Real Cost
The headline promise of Apple Upgrade is clear: smaller monthly phone payments instead of a painful lump sum. Monthly plans start at USD 18 (approx. RM83) for iPhones, USD 12 (approx. RM55) for Apple Watches, USD 25 (approx. RM115) for Macs, and USD 12 (approx. RM55) for iPads. According to one analysis, “Paying USD 18 (approx. RM83) per month for 24 months is USD 432 (approx. RM1,990)—that's for the USD 599 (approx. RM2,760) iPhone 17e. But that’s not exactly a discount, because you don’t own the device.” That is the core problem: the Apple Upgrade leasing plan financializes the smartphone affordability crisis by turning ownership into a rolling fee. Instead of asking whether someone can afford an expensive device, Apple reframes the question into whether they can stomach a low monthly number—while sidestepping the awkward reality that they are paying hundreds of dollars over two years for something they may never own outright.
Klarna Financing Trap: Debt Disguised as Convenience
Partnering with Klarna pulls Apple squarely into the buy now pay later world, where the line between convenience and debt gets blurry fast. BNPL programs like Klarna are designed to exploit instant gratification, nudging people toward impulse purchases they might have avoided if they had to pay upfront. According to Forbes, these services mainly attract customers with low financial stability and often charge higher fees than credit cards, making the short-term relief worse than the long-term cost. Apple isn’t using Klarna to make entry-level devices more accessible; the company explicitly excludes its most affordable offerings like the basic iPad, Apple Watch SE, iPhone 16, and MacBook Neo from the Apple Upgrade leasing plan. This is not a safety net for struggling buyers. It is a Klarna financing trap aimed at pushing top-of-the-line hardware on price-sensitive consumers, many of whom may not fully grasp the long-term obligations they are signing up for.
From Ownership to Renting—and the Threat of Being Locked Out
Apple Upgrade doesn’t only spread payments; it quietly changes what it means to own an iPhone. Under the lease model, you are a renter: you must return the device in its original condition or risk extra charges, and Apple limits what you can do with a product you don’t fully own. During the leasing period, customers can pay off the device early to keep it, upgrade to a newer model, or return it—much like a car lease. But there is a darker edge: code in the iOS 27 beta suggests Apple may limit device functionality for customers who miss lease payments. That turns a missed bill into a direct threat to access, akin to turning off the AC because a car payment was late. When a company can both charge you monthly and remotely restrict the device in your pocket, the balance of power shifts decisively away from consumers and toward the platform’s bottom line.
Why Budget Shoppers Should Think Twice
Apple Upgrade arrives just after Apple raised prices across hardware and services, in the context of an ongoing memory chip shortage and surging demand for AI data centers. Apple denies the shortage directly inspired the plan, but the timing makes its motive clear: keep sales flowing even as upfront prices climb. That is why critics argue Apple Upgrade isn’t designed to increase affordability or benefit the customer, but to boost sales and keep people locked inside the ecosystem. Apple had previously handled its own upgrade program, and even explored building an in-house hardware subscription before shelving the project in 2024; now it effectively outsources the financial risk to Klarna while maintaining control over the devices. For budget shoppers, the message is simple: if a USD 18 (approx. RM83) monthly fee is the only way an iPhone looks affordable, the safer financial decision may be to step back, buy a cheaper device outright, or wait—rather than sign up for a long-term lease that can take your phone away as fast as it gave it to you.
