Apple teams up with Klarna to launch a lease-to-own program for iPhones, iPads, and Macs
Quick Answer
Apple is launching a lease-to-own program called Apple Upgrade in partnership with Klarna, allowing consumers to finance iPhones, iPads, Macs, and Apple Watches over 24 to 36 months.
Quick Take
This initiative aims to make Apple's products more accessible amid rising prices due to supply chain issues and increased demand from the AI industry.
Key Points
- Apple Upgrade allows financing over 24-36 months for various devices.
- iPhones and Apple Watches have a lease term of up to 24 months.
- Macs and iPads can be leased for up to 36 months.
- Consumers can keep or return devices at the end of the lease.
- Apple aims to address rising prices and supply chain challenges.
DeepSignal Analysis
What happened
Apple is launching a lease-to-own program called Apple Upgrade in partnership with Klarna. This program allows consumers to finance devices like iPhones, iPads, Macs, and Apple Watches over periods of 24 to 36 months. The initiative aims to make Apple's products more accessible amid rising hardware prices due to supply chain issues.
Key evidence
- The Apple Upgrade program will allow consumers to pay for devices over multi-year periods, with lease terms of up to 24 months for iPhones and Apple Watches, and up to 36 months for Macs and iPads.
- Apple plans to discontinue its existing iPhone Upgrade program to focus on the broader Apple Upgrade initiative, which is designed to be more inclusive.
- The launch of this program comes as Apple faces supply chain challenges, particularly due to a shortage of memory chips driven by increased demand from the AI industry.
Why it matters
This new leasing program is significant for Apple as it seeks to adapt to market pressures, including rising prices and supply chain disruptions. By making its products more financially accessible, Apple may mitigate the impact of these challenges on consumer purchasing behavior. The program also reflects a strategic shift in Apple's approach to customer financing, potentially enhancing customer loyalty during a transitional period for the company.
📖 Reader Mode
~2 min readApple is reportedly teaming up with deferred payment processor Klarna to launch a new lease-to-own program for its devices.
Bloomberg reported Tuesday that the program — dubbed Apple Upgrade — is set to launch next Tuesday, July 28. It will allow consumers to pay for their purchases over multi-year periods, including iPhones, iPads, Macs, and Apple Watches.
Bloomberg writes that the lease term for iPhones and Apple Watches will be up to 24 months, while leases for Macs and iPads will be up to 36 months. The devices can either be kept or returned at the end of the leasing period, while upgrades to new devices will also be available (hence the name of the program). The report notes vaguely that, in some cases, “transactions will incur an additional fee.”
Apple already has a similar program called iPhone Upgrade, although the company plans to stop allowing new customer sign-ups to instead build out the broader, more inclusive Apple Upgrade program, the report said.
A leasing program is an obvious strategy for Apple at this point. The iPhone maker has been battling supply chain issues wrought by “RAMageddon” — the industry-wide shortage of memory chips that is driving up the price of hardware. Those shortages have been driven largely by the AI industry, which is gobbling up so much memory that it’s not leaving much for the rest of us.
To deal with these issues, Apple recently announced that it would be raising prices, and Upgrade clearly seems designed to make those hiked prices more palatable to consumers.
TechCrunch reached out to Apple and Klarna for more information.
Overall, the new program seems like a shrewd move for Apple, which is currently facing a hectic transitional period. As new CEO John Ternus takes the reins, the company also entered into a legal battle with AI startup superstar OpenAI — suing the company for alleged trade theft.
In short: The company has its hands full, and anything that can shore up sales and keep the business headed in the right direction is worth trying.
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Lucas is a senior writer at TechCrunch, where he covers artificial intelligence, consumer tech, and startups. He previously covered AI and cybersecurity at Gizmodo. You can contact Lucas by emailing lucas.ropek@techcrunch.com.
— Originally published at techcrunch.com
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