The news: Apple will reportedly launch Apple Upgrade, a leasing program covering most iPhone, Mac, iPad, and Apple Watch models, on July 28, with Klarna serving as the financial backer, per Bloomberg. 

The service will launch first in the US online and in-store. It works like a subscription: Customers can pay off a device early, upgrade before their term ends, or return it, similar to a car lease. 

Zooming in: Apple Upgrade requires a soft credit check, and terms vary by device.

• iPhone and Apple Watch leases run 24 months; Mac and iPad leases run 36 months.
• The plan excludes AppleCare and does not cover the Apple Watch SE, entry-level iPad, iPhone 16, or MacBook Neo.

Business and education purchases are excluded, and Apple will retire its current iPhone financing programs after Apple Upgrade launches.

Why this matters: The timing is strategic. Apple raised prices by hundreds of dollars across Macs, iPads, and other devices this year because of an industrywide memory shortage, and it is widely expected to raise iPhone prices again when new models arrive in September. 

Apple had explored building its own device subscription program—tied to its proprietary BNPL solution—but scrapped both plans. Partnering with Klarna instead lets Apple offer more affordable financing without holding the financing risk itself.

Klarna is already leaning into bigger-ticket financing. 

• Its US gross merchandise volume grew 33% YoY to $33.7 billion in the first quarter of 2026. 
• Its interest-bearing Fair Financing loans, aimed at larger purchases, surged 138% YoY, reaching 12% of point-of-sale installments, per Klarna's Q1 2026 earnings. 

By comparison, rival Affirm's GMV grew 35% to $11.6 billion over fiscal Q3 2026 (ended March 26, 2026).

Implications for payment providers: Apple Upgrade gives Klarna a high-volume, high-ticket revenue stream with built-in repeat engagement, since 24- to 36-month terms keep customers tied to Klarna through renewal and upgrade cycles. 

It also reinforces Klarna's push toward full-scale consumer credit rather than small-ticket BNPL. It could also help Klarna in its effort to mirror Amex’s playbook—marketing itself less as a financial services provider and more like a lifestyle brand.

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