The iPhone Upgrade Program is being replaced by Apple Upgrade
apple.com
apple.com
If I am reading the FAQ here properly: https://www.apple.com/shop/apple-upgrade.
> If you decide to buy the device, the purchase option fee is the list price minus any lease payments you’ve made minus any remaining discounts or trade-in credit. (excluding tax and any damage fees).
Lets look at a couple examples:
iPhone 17 pro max would be $1199 to buy (~1273 with tax) or $34.99 for 24 months totaling $839.76. So would cost 433.33 at the end of the lease to keep it
The cheapest 16" MBP would be 2,999 to buy (3186.44 with tax) or $57.99 for 36 months (or 80.99 for 24 months). 2087.64 or 1943.76. So around ~1k to buy it at the end.
It looks like you can keep making payments for 6 months to lower the buyout price a little bit.
So worst case scenario this is a 3 and a half year interest free loan with a higher payment at the end.
Seems not terrible? As long as you treat it as a loan and not a lease you can end at any point it seems fine and nothing really shady about it. You still have the option to own the device for the original cost.
Other than the loss of the iPhone upgrade program and the yearly upgrades, am I missing something here? I guess the biggest thing is you likely can't just pay it off and be done with it if you had the money.
A lot of people aren’t going to have that $433 at the end of the lease to purchase the device outright, and so will have to roll it into another 2-year monthly payment, and another one after that.
So the goal of the program is the same as every other similar one - they want to turn a one-time device purchase into a perpetual monthly revenue stream, while keeping ownership of the asset at the end.
I think you're looking at this too much from the perspective of someone who wants to own the phone, not as someone who wants to consider a lease.
Leases are not a new invention. A lot of people, including very financially savvy and well off people, choose to lease rather than buy depending on the circumstances.
It preserves optionality. If you get to the end of the lease period and there’s a new iPhone you want or the battery isn’t holding up, you can choose not to buy it. You don’t have to deal with selling it or trading in.
If someone doesn’t have $400 to buy out the residual then I doubt they would have had the cash to pay for the whole thing up front. I don’t understand what your argument is.
> So the goal of the program is the same as every other similar one - they want to turn a one-time device purchase into a perpetual monthly revenue stream, while keeping ownership of the asset at the end.
It’s an option. They’re not turning anything into anything. Anyone who wants to buy the device can buy it. You now also have the option to lease it for 12 or 24 months and then after that you can still buy it if you want. Or you can not buy it.
It’s options. You don’t have to use it.
That’s the entire point. They would have bought a cheaper phone, or held on to their old one, but are now paying perpetual monthly payments.
There’s a reason car dealerships never ask “how much can you afford”, but “how much do you want to pay every month”.
There’s a reason Klarna is running the program for them.
a person may reasonably make the choice that they don't need the Pro Max and buy the regular 17.
Now, when the options are: - iPhone 17 ($23/month) - iPhone 17 Pro Max ($35/month)
$12/month extra doesn't seem too bad, except the fact that after 24 months you can't afford to keep the phone and are effectively forced to upgrade to a new iPhone.
I agree that more options are generally better for consumers, but these types of leasing programs are predatory and come at a time when everything is becoming a subscription.
Look, I have one camera with me and one child. As long as the camera gets better every year, I’m gonna want a better camera, every year. I don’t want to deal with carriers and trade-in shopping. Unfortunately this particular deal sucks compared tot he old one.
I’m not financially irresponsible. I value these devices highly and value my time.
This kinda sounds like, "We should make it hard for people to make poor financial decisions." Which seems like an answer completely orthogonal to the problem at hand.
You seem tilted at Apple for offering a financing option, but your real gripe is apparently with some people who have poor financial decision making skills. Those people could (and probably would) do a lot worse with traditional options like a credit card.
Can we at least compare apples to apples (hah) and look at the actual terms of the program here? Honestly they're not bad, and I say that as someone who leans toward purchasing outright.
Or they would have just bought the new phone and sold their old one for dimes on the dollar on e.g. Gazelle.
The bet here is that Apple would much rather you spend ~$35/month perpetually than $1200 every 4 years.
This is a 'good deal' if you're already someone who upgrades their phone frequently, but I would imagine this would end up getting a whole bunch of people to pay more money in the long run to Apple.
If you don't buy it at the end of the 24 month, you've been paying for a very costly lease.
2/3 of the price for a 24 month lease whereas iphones are updated for 7, 8 years ? And the resell value is very good.
Especially financially, it would make zéro sense.
Apple clearly pay the fees for the customers loan but at the end, the only real mistake the customer can make and might regret is switching out of the Apple ecosystem.
That's clever and only mildly evil. Financial savvy people will use it as a "no fee loan" if they can't pay upfront. Less savvy will be more receptive to the commercial discourse at the end of the lease. Eco-deniers will think twice before renewing every year.
And it's actually a consolidation of existing options because Apple already offered "no fee loan" here in EU but you had to choose the option to begin with. Now it's look like this is a single contract and you choose the option at the end of the lease.
Same reason some people lease cars:
* want the New Thing regularly
* are happier with OpEx than CapEx (can be handy for business/accounting reasons)
- from this thread: iPhone 17 pro max would be $1199 to buy (~1273 with tax) or $34.99 for 24 months totaling $839.76. So would cost 433.33 at the end of the lease to keep it
If you upgrade your phone every 1-2 years then what you pay for the phone is something like "full cost - optimistic trade-in value". I see no reason not to do if you know you going to upgrade.
Or at least that's how I understand why Samsung recently introduced literal first-party program for renting phones and is advertising it heavily. The flagships got too expensive.
The Davos ghouls are proven right each and every day:
> You'll own nothing. And you'll be happy
Back to indentured servitude we go, where by "we" I mean us, the poors, not the wealthy, nor their relatively still well-off direct servants (like many of the users here working for Big Tech).
most people live on credit cards as bridge finance between paychecks. when I mean most people - I mean 50% of the population.
Credit card statistics are heavily manipulated because it's easy to make them sound terrible. I don't know which factoid specifically you're referring to, but the studies about "X percent of Americans couldn't handle an emergency expense without putting it on a credit card" often use tricks like including anyone who would pay by credit card if they could. I remember reading some of these studies and realizing that I would have been included in the statistic because I prefer to use a credit card where I can, even though I pay it off before interest accrues.
That's not really applicable because:
1. the study is for an "unexpected" expense. This you can see from 2 years away
2. The wording in the study was something along the lines of "would have to dip into savings", not that they literally don't have any money for it. The fed's survey of consumer finances shows the median household has between 7-13k (depending whether you're counting median income or median wealth) in their checking accounts
https://www.federalreserve.gov/econres/scf/dataviz/scf/chart...
It is not like having a $1200 flagship smartphone is a requirement to earn a living like, say, having a mean of transportation is to many people not living close to their workplace. There is nothing one do in a flagship that you can't do - albeit maybe with less quality or slower - than a lower end one. All allows to make and receive calls, use messaging, have a browser, apps.
To be honest, I am clumsy and break stuff easily so I have never spent more than $200 on a smartphone, my current one is a pixel 6a running grapheneos that I bought for 180€ 2.5 years ago. It makes very good photos actually and is fast enough for everything I do. I understand people can want something nicer but it is not a need.
- written on my S10
I don't have to deal with insurance, parking (if parking is free by you, it shouldn't be), maintenance (I work on them myself, I just pay for cheap parts), and fuel is effectively free. That's all on top of the car payment for people who haven't paid off their car.
Multi-year zero-interest loans are also commonplace in high-price, high-margin specialty retail: think La-Z-Boy, Sleep Number, home improvement, hot tubs, home gym equipment, etc.
Yep, which reduces the need to make new devices notably better than old ones, since you'll always have a steady stream of customers coming off their leases.
By getting people to be default-subscribers rather than purchasers who may decide to upgrade, they improve their odds of keeping a larger chunk of their hardware revenue stream.
It is not rolled forward. If they don't want to pay the $433, then they don't. They return the device and the new device's lease doesn't include that $433.
It's not like a used car loan that some people have that keeps growing with each transaction (and at insane interest rates).
If someone can’t plan ahead 2 years for a $433 expense, they definitely should not have a top of the line iPhone. When my income was low I had an iPhone SE that cost $329.
That rich man was born into wealth, so he has no concept of the lives of poor people.
Precisely what they should have done for service revenue instead of milking App Store for the past 10 years. They should also have bundled Apple Care as part of it.
It would also allow them to hike up their price for iPhone. For example I wouldn't be surprised if the upcoming iPhone Fold and next year's iPhone 20 / XX start at $1499 to $1999.
My question is how will this roll out world wide, is this going to be like Apple Credit Card, Apple Cash and other things that is US only? Who is actually paying for the interest free loan. Somewhere along the line someone has got to give.
This is all good direction that is happening in the past 12 months, MacBook Neo, Apple Upgrade. Hopefully they will also fix the software part. macOS doesn't need annual upgrade. Perhaps neither do iOS. And the last thing would be about the App Store. But I guess that will take a lot longer.
But they're not actually interest in owning 2 year old phones though right?
They're just interest in you / 2ndary market not owning any?
They’re not putting it back into a box, listing it for sale, and pocketing the difference.
I'd imagine even a phone they can't fix to sell still has some value, even as scrap to them especially as the costs of every damn material that goes into any electronic device continue to soar.
And that all being said: two things can be simultaneously true at once. Leasing is a perfectly valid form of... well you can't really say ownership, acquiring goods I guess? And it also does mean Apple can now turn what may have been one-shot purchases into people who are just fine paying a monthly payment ad infinitum. And that, in turn, opens the door for keeping people on a perpetual new-phone treadmill of monthly payments that involve them never actually owning anything.
You can very easily tie this into the Samuel Vimes Boots Theory of Economics:
The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.
Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.
But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.
They’re obviously making money on the whole purchase and program because they’re a business, not a charity.
The assumption that they’re making significantly more money on this than direct sales may or may not hold. It could be that they’re targeting a similar level of end-to-end profit as direct sales but using this to expand their market by providing more purchasing options.
Some people get angry at the prospect of a company making money, but they’re not charities. Everyone should do the math and decide which purchase options work for them. What works for you may not be appropriate to force on to the rest of the population.
One month of median US rent buys three 55" TVs.
The math has changed.
The other thing to consider, that while Apple might sell you the phone for $400 or whatever, they might re-sell it as refurbished for $700.
You literally don’t own the hardware, it’s a lease.
That said, you can purchase with financing with an Apple Card, or with numerous other financing options like carrier financing. However, leasing allows the purchase prices of phones to continue climbing while still presenting a palatable monthly payment.
I think what’s going to happen with this is a lot of people will be lured in with low payments and then be surprised with the ending “keep your phone” payment, where it will feel like it makes more sense to just get the new phone and continue the same payments.
Paying a $400 payment on a 2 year iPhone will look insane as that’s the depreciated value of a 2 year old phone.
Check ebay. That's around the price of a pro series iPhone 2 years old.
If you're the person who has leased this phone, you make all your payments and get to the end and your bill to keep the phone forever is going to seem kind of high.
Obviously, that's logical. In your lease, you have only paid the price of depreciation.
Just like with cars leasing is the most expensive way to own them, but I guess there's a certain buyer who doesn't want old stuff.
Is a 3 year upgrade cycle for a MacBook Pro unreasonable? Would you get a lower spec machine since you were not trying to maximize the life of the machine? I know I always tend to overspec my machine to keep it for as long as possible.
My M3 MBP with 36GB of ram (looks like it was about 2500 3 years ago) would get me $945 in trade in credit. May be able to get more on eBay but I can't argue with just doing trade in is easier. A bit less than I would "save" by just upgrading at the end of the lease and this already is not the base model so the number does shift.
Especially when I look at the payment options right now I could finance that MBP about $250 on my Apple Card for 12 months no interest, or $57.99 for 36 months. and then I get a new one.
Would probably depend on what it is I was doing with the machine, am I doing tasks that would actually benefit from better and better machines like video editing and similar tasks or am I just using my computer fairly basic in a way that even an M1 machine still handles just fine.
For a personal machine? Yes that’s something I see as unreasonable, MacBook Pros have a very long lifespan. M1 laptop are still pretty awesome machines. For a business an upgrade every 3 years could make sense
Is that threshold for using a Pro machine 3 years, I don't know probably not for most people. My M3 Pro from almost 3 years ago is still running beautifully. I could make the argument that more power would benefit what I do with this machine without a doubt, is it worth the upgrade? I don't know, but I would be lying if I have not been thinking about it.
But I also think about the mentality I had when I bought this machine, and the mentality I had when I was looking at possible upgrades just a few weeks ago. Possibly paying more to overspec the machine compared to my current use case assuming that I want to continue to use it in 3 to 4 years.
I don't know if that calculation is necessary as cut as dry.
That's precisely why they set it up this way, honestly leasing always made more sense for businesses. I prefer to keep my phones, peace of mind knowing, if I lose something that somehow did not make it to the backups, I can just turn on my old phone and find it.
They are also dumping a weird risk premium on the end user. I literally get a new phone every year with the upgrade program, there’s no way I’ll be doing that going forward, at least through the lease. I’ll just buy it with cash and wait for a deal.
That is my big problem with leasing portable things. I never get AppleCare because I can self insure. But if I lose the phone 8 months into the lease I am deep in a hole.
Apple will benefit in two ways. They will make 125% of what they used to make on every phone they sold because they can sell it twice and more people will be forced into the two year upgrade cycle (because they can’t afford the buyout at the end) increasing their overall sales numbers in general. If you’re a consumer, you should just treat this as a 24 month interest free loan and then buy the phone outright at the end of that period. If you put the outright cost of the phone into a bond (say 7.5%) during that period, you will even get 3 months payment free and only pay for 21 out of those 24 months.
This also pushes term completion with early termination charges (discourage selling before term ends).
And they know money will be tight for their consumers, they can't lower prices anytime soon so give out 0% loans.
Following their tradition of screwing the frugal, cheapest options seem to be excluded.
Its a subscription model for Apple hardware.
Far beyond the actual/original cost of the item which is why it’s not a good deal for an individual.
Once again, taking advantage of short term thinking.
The flip side of this, Apple gets more control of the resale market, pushing more buyers into the new device market.
In theory it lets them solve any market problems that emerge where independent resale markets let high quality devices cannibalize sales of new devices.
From: https://www.sellcell.com/blog/how-often-do-people-upgrade-th...
Considering the cost of a battery replacement, it's not the worst value proposition in the world.
I had a friend who bought a new Mac every year, selling his old Mac. His calculation was that it was about the same price as keeping one Mac and upgrading every 5 years.
I'd consider leasing a Mac through this program. I priced one out, with the options I chose it's $8149, lease for $177 (6372 for 3yrs, 8496 for 4yrs).
Yes, at the end of those 3 years I don't have a mac, I have to keep paying, but I'd prefer a new Mac every 3yrs and it's just easier than trying to sell it for $1777. It doesn't seem like a bad deal to me, plenty of people lease cars. Plus, if you consider you can keep your moneny in interest earning account, then at 3% you'd end up with $2256
I'm not saying that makes it a good deal for you, but I personally like the idea of not paying out $8149 day one, especially for something I know has a shelf life. I'm on an 2021 M1 Mac. It works great. But I've also tried to run 70b LLMs and run out of memory (64g), so I think about upgrading to 128g which, being Apple, I can only do by buying a new mac.
I considered that at one point, and it would have made sense based on prices alone, but it didn't work at all once I factored in having to pay sales tax on a brand-new Mac each year, and the cut eBay takes on a sale, and the fact that the eBay buyer also has to pay sales tax.
If I lived in a state with no sales tax, and could rely on selling locally with Facebook Marketplace or something, then I'd totally do it just for the infinite warranty coverage alone!
Still bugs me that states charge sales tax even on used items. It just seems wrong.
Yes VAT is a better system.
Companies that require frequent hardware refreshes would benefit from this, though Apple already had has programs for those.
It’s not just a 1 year program.
The comment you replied to had numbers for the 4 year option.
Isn't it this:
>> His calculation was that it was about the same price as keeping one Mac and upgrading every 5 years.
This will definitely offset some of the loss they will get from people buying a lower model phone or laptop due to the price hikes, as thats exactly what it is designed to do.
Usually you'd find people asking for 4 to 6k$
But that’s a lot of having to deal with FBM.
Damn, this is the dealbreaker for me.
Leasing an unlocked iPhone and being able to use my current $25/mo MVNO of choice (US Mobile) may have actually tempted me (I currently buy outright and then tell myself I'll sell my current phone when I upgrade, but in reality I just have iPhone graveyard at home.)
"For iPhone only: In order to lease an iPhone, you must select an eligible carrier (but you cannot use a prepaid carrier plan). A leased iPhone is always unlocked, so you can switch carriers at any time, subject to your carrier’s terms."
So it... is unlocked? I am also on US Mobile and don't want to leave it
With hardware prices increasing, selling financially challenged people on 'cheap' monthly payments seem like one way to keep the stock price pumped at these levels.
I guess they are one of the good trillion corporations though?
https://finance.yahoo.com/technology/article/apple-tops-5-tr...
I feel like some people are ignoring the fact that "financially challenged people" have always been paying monthly payments for their phones via their carrier's lease programs, which are very popular and have been a thing since the first iPhone.
People need phones, this is a good program.
> I guess they are one of the good trillion corporations though?
This but unironically
They were probably using credit cards at 29% to buy the exact same phones that are now 0%
Net net it’s a win
Do not presume to anticipate my love, drone.
I know a lot of people use postpaid, but I can't understand why. I'd challenge anyone to justify that decision, given that the phone "deals" are rarely even much of a subsidy as opposed to a financing scheme that acts as a contract, and the plans cost about triple what I pay every month, for fewer features and equivalent at best priority and speeds.
[1] https://9to5mac.com/2023/06/15/apple-card-financing-sim-free...
I subscribe to /r/NoContract/ so I have a pretty good idea what's out there.
Visible+ is a comparable pre-paid plan, it's $29/mo but that's a teaser rate and to keep it past one year, you'd have to port out and port back in for whatever deal they have in one year. The normal price is $35/mo, so I'm beating that. (Visible would also mean managing 4 separate accounts since they have no multi-line plans.)
Total Wireless is a bit cheaper ($26/mo) but I keep reading terrifying customer service issues with them including most recently losing number during the porting process.
Aside, I briefly used US Mobile earlier this year to port a VoIP line to Google Voice (GV will only port-in mobile numbers). US Mobile's customer service is exceptional. Would recommend them heartily for pre-paid service. But they don't currently beat what I'm getting from Verizon post-paid. I'd consider them if I can't keep my loyalty discounts next year.
Another thing to note about Visible+ is that if you have an Apple Watch with cellular and want to use that with your plan there is absolutely no reason to consider Visible+.
Watch support can be added for $10/mo but that brings the total to the same as their highest level plan, Visible+ Pro, which includes watch support. That plan is $45/mo $450/year ($37.50/mo) and promotional discounts run out.
As far as I was able to tell, Visible+ Pro is the best or very close to the best deal for people who want Apple Watch support in the US and only want one line. You can get lower prices per line on postpaid plans with multiple lines but if you will only have one the postpaid plans are ridiculous (even before you add in watch support).
It is hard to get eSIM to work, but they have good customer service (but you need accses to a phone to call them, so you should try something like textnow or Google Voice) which helped my friend set it up.
It is not a intruductory offers, AFIK.
Important: Does this include taxes and the many "regulatory offset fees" or whatever they call them? My numbers do include everything.
Looks like that plan[1] offers 30GB of mobile hotspot. I get 50GB.
The Unlimited Plus throttles video by default to either 480p, unless you're in a UWB (mmWave?) tower you get 720p. You can get "up to 720p" even on "plain" 5G by adjusting a setting though. My plan does the same default as well, but when I adjust a setting, I get unthrottled video.
You get 50% off a data plan for a watch, which looks like is a $10 plan? So $5 add-on for a watch. My plan includes a watch for free.
It doesn't look like you get international roaming with Unlimited Plus. I get 20GB of roaming in 125 countries in my plan. I've used it, it works great.
And to get the rate you're talking about, you have to buy 4 lines. No problem for you, but it's notable that singletons pay $80 (with autopay) for that plan. Mine is $32.50 since I pay annually (actually it was less because I paid during a sale, but I don't want to make claims that aren't easily available anytime). I don't have to ever call and threaten them to stay at $32.50 because that's the full price.
Anyway, that's US Mobile as you may have guessed - and that's their best, Unlimited Premium plan.
Oh, I also pay an extra $10 a month to add a second eSim on a different network, a feature they offer. It uses your same allowances (for me, hotspot is the only thing that's metered anyway) but means that I can hop between AT&T and Verizon towers at will. You can also just port your main line to a different network at any time, if you just decide that you want to. They support all three US networks.
Yes. Breakdown per line:
UNLIMITED PLUS $55
Auto Pay & paper-free discount -$10
LOYAL $20 FOR 12 MO -$20
Surcharges $4.57
Taxes & gov fees $1.48
Total $31.05
Verizon dollars -$0.30
FWIW, for years I was a Verizon employee and had a 50% discount which is why I started post-paid. They also have the best service in my area. I'm no longer an employee so they treat me like any other customer and I'd pay full price but for the loyalty discounts.
But you don't need to be a former employee to get those. You just need to haggle with customer service once a year. Some years all I have to do is unlock the line and ask for the porting code and they immediately text me a discount.
- there's much better international roaming: free up to 20GB/mo
- you can switch you network to any of the big 3 if you need to. e.g. if you're traveling and your preferred network is crap
- you can do dual-network for another 7.50/mo and turn it off/on as you like
I've been on this plan for almost a year now and it's take a lot to lure me back. The international roaming alone has probably saved us ~$300 in that time.
Still, thanks for pointing it out.
I check with people that come around or in random stores if they can beat it, alas they cannot.
Two reasons: data caps and device cost.
People want iPhones but they cost $1000 outright which isn't a small amount of cash these days so they roll the cost of the device into their monthly bill. The average consumer also doesn't understand how mobile data versus 802.11 works - their kid doesn't activate Wi-Fi on their phone or download anything, they see a large number with "GB" on the end, and they pay whatever is necessary to keep the Instagram scrolling and Disney+ flowing.
Buying an iPhone outright, flipping the old one every few years (they hold their value well) and using a $30 a month 10GB plan is doable if you have money and are savvy enough to download podcasts and use your home's AP for data.
Carriers certainly aren't incentivized to educate consumers better since they'd rather make money on device installments and milk them for hundreds of dollars a month because they "have a large family and need a lot of data". Home broadband marketing is even worse - why a family of four "needs" 500 Mbps down is absolutely beyond me. In an ideal society this type of consumer literacy would be taught in school but I'm not holding my breath.
If you really can settle for 10GB though, you could do it for even less.
I can see how some people feel like the phone financing is something they need if they have cash flow problems and trouble accessing credit, but boy do those postpaid carriers make you pay for it, both in the payments themselves, AND in the plan itself costing more than twice as much what I pay even if you've finished paying off your phone payments.
> Financing available to qualified customers, subject to credit approval and credit limit, and requires you to select Citizens One Apple iPhone Payments or Apple Card Monthly Installments (ACMI) as your payment type at checkout at Apple. In order to buy an iPhone with ACMI, you must select one of the following carriers (but you cannot use a prepaid carrier plan): AT&T, T-Mobile, or Verizon. An iPhone purchased with ACMI is always unlocked, so you can switch carriers at any time, subject to your carrier’s terms.
They’re discontinuing this and replacing it with Apple Upgrade, which is structured as a lease. Apple owns the device and you make payments. You either return the device or buy it out at the end.
The distinction probably doesn’t matter much to the typical consumer, other than the final price differences. Some people have an emotional attachment to knowing they own the phone instead of leasing it (I’m emotionally attached to this position, however illogical) but in the end it comes down to having a device in your hand for a monthly payment.
Your monthly payments stopping and you own a device is a world apart from your ability to pay monthly ends, and, unless you can find $x hundred dollars, you need to roll onto a new monthly lease.
Mathematically there might not be much in it from a $in/out perspective, but for people who don’t have large disposable incomes the reality is they are vastly different
Instead of automatically owning the device after making all payments, you can choose return/upgrade/buy it at the end of the lease. The new program is backed by Klarna instead of Citizens Bank, uses a soft credit check, and no longer includes AppleCare+ by default.
The fact that the page is not particularly clear about any of this should tell you everything you need to know about this change.
On the one hand that gives users an option.
On the other hand, that is a way to hide a price increase. Also, those doing this are almost obliged to take AppleCare, as (https://www.apple.com/shop/apple-upgrade):
“What do I do if my device gets lost or is stolen?
If you have AppleCare+ Theft and Loss for your iPhone, iPad, or Apple Watch, you can file a claim at mysupport.apple.com/theftandloss.
If you don't have AppleCare+ Theft and Loss coverage and your device is stolen or lost, you'll need to close out your lease by paying the early termination fee or choose to pay the purchase option fee (plus any applicable taxes and fees). You can do that at an Apple Store, or through the Klarna app. You can then start a new lease with Apple Upgrade, finance with Apple, or buy your next device with a one-time payment.
You will continue to be charged your monthly lease payments until you either pay the early termination fee or purchase option fee. If you take no action, Klarna will continue to charge you your monthly lease payment through the extension period, and you will be charged the purchase option fee through Klarna.”
So if the target demographic, the person that does not have money to buy an iPhone outright, is mugged, they need to essentially buy the iPhone outright or they start racking up interest and fees.
(I don’t care if they say the target demographic is “people who upgrade every 2 years” instead. If that were really the case, you don’t need financing, just a buy-back program)
With this program, you can either pay a lump sum to cancel the lease early, or you can continue making monthly payments, but at the 24-month mark, since you can’t return the phone, you’ll still owe them $430.
Giving people the option to not buy insurance is not evil. It's just a seller giving a buyer options at different price points.
Looks like a recession indicator to me.
You'll own nothing and you'll feel weird about it.
Even if you are upgrading every single year, it works out roughly the same to just buy every phone outright and then trade in last year's model -- you typically get ~half your purchase price back as trade-in value after a year anyway.
Esp if you can swing a battery replacement at 2 years
You can stick that in your closet for one hell of an agent playground.
A standard $33 server has trash specs by comparison.
[1] https://www.ifixit.com/News/94386/the-truth-about-apples-fre...
Think of it from Apple's perspective: You sell a phone for $1,100 and get a 37%[1] margin on it, so that's a $407 profit margin, and a $693 cost to make it.
That phone gets Apple $768 in lease payments according to their site.
Then they take the phone back from the user at 2 years old. EBay shows 2-year-old iPhone 15 Pros going for about $400 so let's assume the wholesale prices is $300.
So Apple has the old phone and can sell it for $300 pure profit before tax or $237 after 21% federal tax, but they know that its existence will displace a new iPhone sale somewhere. Or they can declare it as "too damaged to resell" and shred it, probably take a tax deduction (for the official residual of $332? I'm not sure) for that loss, offsetting $70 of taxes elsewhere, and (very very important point here) because they know they'll sell one incremental new phone, they can expect to have an additional $1100 of topline revenue to show, and another $407 gross profit that they get to book.
Sell it: $237 - $70 opportunity cost of tax deduction they don't get = +$167 to gross profit, Shred it: +$1100 topline, +$407 in gross profit, +$70 in EBITDA.
I'm not a real accountant so I'm sure a few of these figures are off, but I think my main point is valid: Since Apple's main motivation is to increase their stock price, they may benefit more from shrinking the aftermarket than they would from harvesting the value of the old iPhone.
This logic does depend on an additional working semi-late-model iPhone finding its way into the hand of a person, or there being a chain of people, at the end of which having someone who won't buy a brand new iPhone this year, but I think it's hard to argue it doesn't.
[1] https://axis-intelligence.com/apple-statistics/
[2] https://www.apple.com/shop/buy-iphone/iphone-17-pro?purchase...
Note that in your earlier link they are shredding non-working phones that need repair, so those residual values are closer to scrap value. That's different.
Why haven't I upgraded? Because there's no mini and all they make are phablets now.
It doesn’t look like Apple will be going back to something smaller than the 17e. Unless you count the upcoming foldable, which while shorter than the mini, however is also wider, thicker and heavier.
Presumably this ability means that Klarna has a lower risk of nonpayment, and is willing to accept a smaller cut of the total price from Apple.
1: https://9to5mac.com/2026/07/21/ios-27-code-suggests-apple-co...
Reads to me like there’s code that could be that, but it’s not certain.
Local prices around me always seem weirdly high - I sort ebay by cheapest price+shipping, match that, and that usually puts me cheaper than 90% of local listings and gets me plenty of interest.
TBH I'm not clear on why anybody outside of rural areas is selling on ebay for non-niche things.
1) Digital goods, so very little friction. 2) No liquidity locally so you go to the large market. 3) Selling large volume. 4) Some third party to verify payment when it's not cash.
There are more and more alternatives though.
https://9to5mac.com/2026/07/21/ios-27-code-suggests-apple-co...
It will be curious to see if the first Klarna defaults will start triggering a future Restricted Mode on the phone and the parts get blacklisted from re-use.
I assume certain apps will get an entitlement from Apple to enable/disable this on the device.
edit: confirmed they aren't... yet.
https://www.theverge.com/tech/972063/apple-upgrade-program-n...
This is all a relative scale though. But if we're looking at smartphones specifically, I'd argue Apple has been the least force obsolescence of anyone. I wouldn't be surprised if there are some smaller manufacturer niche cases that surpass it.
https://www.apple.com/shop/apple-upgrade
It looks like this leasing program is just moving into a more generic/Apple-wide offering... not sure if the fine print changes.
[edit: from the comments, it sounds like the difference is it was previously 0% interest financing and no longer is]
Now it's just a normal lease product with a 0% money factor through Klarna, that also works across Apple.
What this does is gives Apple more "price flexibility" (aka, they can raise prices more easily, which was probably a lot of the driver for this), but also gives consumers more buying power flexibility since it's a simple product that works across the board rather than a bizarre iPhone specific optimized financial instrument.
1. New customers: lower barrier to entry, try, or switch into the ecosystem.
2. Loyal customers: Upgrade propensity is increased as friction decreases.
3. Innovators: offers options for those who want to try a model, but might later change their minds for something that better suits them.
All this increases exposure and engagement to the brand, which translates to increasing sales and revenue.
1. Consider trying other brands
2. Pass on their existing (still quite capable) phone to a family member (taking him/her out of the purchasing loop)
3. Stick with the existing model for longer as they don't find a compelling reason to upgrade.
Permanent "leasers" swap devices every few years, stocking the company's second-hand options and increasing average lifetime value of the participating products.
My MacBook Pro was over $6,000 refurbished, and this was before Apple raised prices. There's not really a point in financing smaller purchases that you can just buy outright.
They have Apple Card so presumably they are capable of providing financial services like loans on their own, why bring in a third party who will take a cut and force your consumers onto their app with a bad reputation?
Apple Card is the result of a co-branding deal between Apple and Goldman Sachs (which is currently in the process of exiting the deal and being replaced in that capacity by JPMorgan Chase). Apple provides the branding and some minor fintech features; Goldman (or in the future Chase) issues the card and is on the hook if people don't pay their credit card bill.
Presumably for this particular program using Klarna was cheaper because Klarna already specializes in precisely this kind of transaction.
I think Apple gets sweetheart deals so their partners often lose money. Klarna likely sees this as a marketing coup to have their predatory sussness promoted by the Apple halo brand.
If there was profit to be had, I'm sure Apple could buy a small bank and spin it off as a subsidiary with little drama, it's just not the best of their options.
In any case, doesn't this sound like an insane contract for Klarna to have signed? It's freaking Apple. Mind blowing deal for a buy-now-pay-later company to sign. Imagine being in the chain for an Apple product. What a coup.
Does this replace that as well?
Ideally I think a reasonable price for a phone, for my use case, is around $200 (incl. my 25% VAT). That leave me with the option of getting a really shitty Android phone with an operating system from a company I have zero trust in or pay slight more than I'd like for a four year old and use iPhone with an operating system I trust ever so slightly more.
For people like me, who view a smart phone as a necessary annoyance there are very few options. The few apps I have and need aren't running on open source operating system and modern society has decided to make my life rather hard with out those apps.
Right now I'm using a 2nd generation iPhone SE, it solves the same problems that my iPhone 6 did and I don't see how an iPhone 17 would make parking, mobile payments or charging my car any easier. People keep talking about how good the cameras have become, yet they don't even bother switching to portrait mode when taking pictures of people close up. When we're out my photos are often then ones people ask for and use, because I actually spend a few minutes on it, yet my phone have the shittier camera!
that's a bit of a deal-breaker for me, at least for the ipad.
you see, an iphone becomes unusable the moment the glass breaks, this is what apple reps. think. so it is some packaging that in their opinion makes up critical part of the value provided by the device. not the chips inside, or cameras, but the stupid glass cover.
and they wouldn't buy back. so this whole upgrade nonsense is perhaps valid only in very extraordinary situations.
same for broken screen or broken camera. so what I do then is try to reuse, replace, and go to small shops for repairs with third party parts, for as long as I can, so that my CO2 footprint goes down or at least extend the life of the device.
I'm pretty sure all my old iphones will at some point be running jailed servers and sandboxes, or perhaps even - claws.
See their own repair pricing of $349 for an iphone 13 vs $159 for an iphone 14.
Getting very expensive Mac hardware leased is where the juice is. As well as normalising subscription revenue and you own nothing of course, but the interesting dynamic will be shifting 10k hardware to developers that wouldn’t have considered dropping 10k on their setup
Unless you are happy with Apple or Google literally owning your phone and everything in it, the solution is to buy a Pixel, with cash, unlock the bootloader, and flash GrapheneOS.
Why would I tie up $1,200 upfront in a device that’s going to be obsolete in a couple of years when I can spread the cost over time, preserve cash flow, and (if it’s a legitimate business expense) deduct the lease payments?
Keeping $1,200 in my business earning a return is often worth more than prepaying for a depreciating asset.
People happily lease $80,000 vehicles for exactly these reasons. Applying the same logic to a $1,200 phone isn’t irrational, just the same financing decision at a much smaller scale.
There's no interest, no fees. The total lease price (if you buy out at the end) is the same as the retail price. There's no downside to it at all.
If you are someone who upgrades annually, you're now paying ~$599 split over 12 payments vs. ~$1199 up front and either trading in or trying to sell your last gen privately. It works out to about even on a trade-in->upgrade every year cycle, only you don't have to fork over the $600 up front.
I don't think anyone will ever excercise the buyout option since the phone will never be worth more than the buyout price. And like you're saying, this program does not make sense unless you are upgrading every single year.
I mean in any case, every option looks defensible once you've accepted the premise that you need a new phone every 12 months. Any minute differences in costs are just rounding errors. Like I really don't think someone upgrading every year is going to have a significantly different retirement income because they saved $1200 every year by not buying the iphone outright. It's really just a convenience thing, not a financial decision.
they literally say you will pay large fees in those cases. it’s basically self insuring.
Well, kinda. Various vehicles have fleet-only trim levels that are the cheapest models available. The reasons that you'd lease a $80k Ford F-150 Raptor are somewhat different than the reasons that you'd lease a $39k F-150 XL.
The entire point of the iPhone Upgrade Program was to make it painless to swap to the newest iPhone every year. Without that, there's no value proposition.
Especially if you're someone who upgrades every year. 12 month option on a 17PM works out to ~$599 for the year vs. $1199 each year. $599 is roughly what you'd pay for each years new model assuming you trade in your previous gen each time, so at worst it's even with what an annual upgrader was paying already, at best you might make out a little better (assuming you are just doing trade-ins and not private sale).
There's no interest or fees, and you get to buy it out at the end if you want to own it, and the lease price is the same as the retail price, I see no downside.
The iUP was better about giving the choice to just buy it out at the end. This one is more rigid:
>Terminating your Apple Upgrade Lease: Closing your lease and returning your device terminates your lease. You may incur substantial fees if you terminate your lease before the end of your initial lease term. You may have the option to upgrade to a new device by entering into a new lease agreement and returning your prior device. If you upgrade, your new monthly payments may be greater than your prior monthly payments. If you do not upgrade, terminate your lease, or purchase your device by the end of the initial lease term, the lease will convert to a month-to-month lease for up to six months. Your monthly payments may increase during the month-to-month periods. If you take no action at the end of your extension period, you will be charged the purchase fee under your lease. You will not own your device at the end of your lease, unless you pay the purchase fee. Insurance is not included in your lease, and you may incur damage fees if the device is lost, stolen, or not returned in the condition required by the lease.
Partnering with Klarna explains it quite a bit. They make money on penalties. This new plan has all sorts of sticks it will beat you with if you stray off the path, so it's perfect for them.
Pay $32/mo (so $770 total) to use an iPhone for two years and then give it back to Apple.
This is truly the most dystopian timeline.
At the end of your device lease term, you have an option to buy out your leased device. With the buy out cost being equal to the device sticker price minus the amount you had already paid on your lease.
This seems pretty fair to me tbh.
Why? Leasing has always been an option that some people and businesses prefer, depending on the circumstances. It’s commonly done with cars. In business situations leasing can be very common because it works well with your cash flow and doesn’t require taking more debt on your books.
You can buy out the item at the end of the lease term. Some people like this optionality because they get to defer the purchase decision into the future and benefit from any new information, like whether or not a new iPhone is worth upgrading to or how the battery is holding up.
> Radio Rentals was the largest television rental group in the UK and claimed that at its peak it had more than two million customers, more than 500 shops, 3,600 technicians, 2,700 skilled installers and a large ancillary staff. It had sales and service locations across the UK; the Radio Rentals logo being a common sight on many High Streets.
Also calling the latest iPhone “basic consumer electronics” is out of touch. The budget options are older generation iPhones or other phones, not one of the most expensive brands on the market.
> While our customers have loved the iPhone Upgrade Program, we’re always looking for ways to give them more flexibility, better value, and a more seamless experience.
If I were malicious dictator for life, there would be a special section in my gulags for the people who write copy that entails telling customers it's raining while pissing on them.