Apple introduces leasing program for iPhones and other devices | Hacker News Reader

Apple introduces leasing program for iPhones and other devices

nytimes.com

39 pointsKorwell74 comments

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For what it’s worth, it’s lease to own:

> At the end of your initial lease term, you can do one of the following:

> Upgrade and return your current device. Footnote ◊

> Leave the program and return your current device. Footnote ◊

> Buy the device outright with a one-time payment from your Klarna account.

https://www.apple.com/shop/apple-upgrade

Slightly mixing up programs there - the initial statement ("your loan will be closed") applies to customers of the current "iPhone Upgrade Program" which is now being replaced by the new lease program via Klarna.

The new program, at the end of the initial lease term, will switch to an extended 6 month month-to-month lease; then at the end of that if you have still not acted, Klarna will charge the remaining buyout amount.

> For an iPhone 17 Pro 256GB with a purchase price of $1099 (excluding taxes and any trade-in credit), the typical monthly payment is $31.99 (excluding taxes and any trade-in credit) for a 24-month lease term and $45.99 (excluding taxes and any trade-in credit) for a 12-month lease term.

Riding out a 12 month term, you'll have paid in $551.88. Buyout at that point is $547; ride out the next 6 months month-to-month another $45.99/mo and Klarna will then ding you $271 and close it all out. I assume this is how they're going to avoid any kind of possible "paying more than the cost of the phone" shenanigans from a perpetual lease.

Good catch. Edited the original post.

What is more positive about it is just that there’s no interest or money factor.

I do think it is ultimately an effort to shorten upgrade cycles. Lower the monthly payment enough and keeping the same payment will look appealing to many customers.

From a positive perspective, I think it’s preferable to trade-in programs if you were planning to do that sort of thing, and I think it wrestles a little bit of control back from carriers who have been very aggressive about upgrade deals that end up locking people in (even though there’s no “contract,” the effect is the same, since you lose your bill credits if you switch providers before the term is up).

I typically buy the newest model outright with a trade-in. Curious if this'll be cheaper. Probably not.

Might see if this pencils out for work uses - easier to establish and budget a boring lease program than have purchases of phones and laptops scrutinized.

Apple is introducing this now because hardware capability ceilings are being hit and component prices are preventing higher specced components from being used.

I buy a new (non apple) phone most years, but I'll probably skip the next 2 years due to flatlining of specs and increasing price.

Agreed, there is very little happening from generation to generation. Yes, the 17 Pro had a redesign and better thermals, but was very boring otherwise. I don't really see why non-enthusiasts with a 14/15/16 Pro would upgrade.

The 17 was a good step up, but it's hard to cheer for finally getting a 120Hz display, while 300-400 Euro Android phones had them for a few years already.

The iPhone Air was the only really interesting model. But with only one camera and high introduction price, I don't think it was a failure in the market. Samsung had a similar problem with the S25 Edge - fewer cameras, but priced near the Ultra (the Air/Edge are a steal at the current pricing of 880/520 Euro, if you can live with the battery life).

I'd love to see more actually meaningful features. While the Samsung privacy display of the S26 Ultra may not have been perfect the first iteration, it's a innovative feature that is useful to a lot of people. (No, a privacy screen protector is not the same, I want to see most apps with the full flagship display glory.)

Another issue is that the pricing barely gets reduced over the year, while you can already get an S26 for just over 600 Euro.

The only phone I would consider upgrading from my 14 Pro Max is Air. I think phone cameras have hit a limit several years ago and stopped improving, the end results looking really weak even with all this heavy post processing. Air finally doesn’t feel like a brick while having a large enough screen. It’s a breath of fresh air, pun intended.

Take a look at the regular 17 then. Only slightly more expensive, a couple grams heavier but it will not be as much of a downgrade from your 14PM. The 17 is very good in the hands with that screen size. And it has an aluminum housing.

The regular 17 is cheaper than the Air, not more expensive. And it has a better camera and battery and a slightly worse processor (but still better than the 14 there). The next gen Air might be worth getting but the current one is an awkward model that only makes sense if you want it for its thinness. It is $200 more than the plain 17 with only one better feature (processor) other than thinness and $100 cheaper than the Pro which has a lot of improvements (battery, camera, screen).

In most of Europe the Air is cheaper than the 17.

The 17 Pro also has the benefit of the aluminum housing.

Is that the base price from Apple or with discounts to try and move the product?

Price in shops. The MSRP of the Air is higher.

I have an iPhone 14 Pro and honestly can’t tell the difference between mine and the newest gen besides the different colour options.

Releasing a new iPhone every year at this point is stupid, innovation has slowed right down, but Apple aren’t going to turn down the free FOMO money.

> Releasing a new iPhone every year at this point is stupid

That buying a new iPhone is stupid for the typical user doesn’t mean releasing a new on every year is stupid for Apple.

If users upgrade their iPhone every X years, Apple still can sell their new model to 1/X of their customers.

That means they have extra costs of having to design more new models and losing some economies of scale, but it also removes some risks:

- it prevents their phones from looking old compared to the competition

- it means that a slightly flawed design can be iterated upon faster

- at Apple’s sales numbers, I’m not sure economies of scale matter much. Scaling down might even help them. Imagine having to negotiate production of half a billion identical screens over a period of X years. A one-year contract for a hundred million ones means Apple can switch easier between suppliers, putting some pressure on suppliers to offer lower prices.

The iPhone Air not only lacked in the camera department, it also didn’t have video output, no SIM card slot and it had a titanium housing. And for me personally it was just too big.

If you don't mind me asking, why do you buy one new phone every year?

I seem to be hard on my devices. They get nicked, scratched screens, battery worn. I am wealthy enough that this expense is not particularly impactful to my financial goals. So, I upgrade yearly. I am seriously considering not going that way this year.

Most years the camera improves enough to be worth it for me and I have a few different people my hand-me-down phones go to so it averages to 1 new phone every 4 years for the group.

The next few upgrade cycles for Apple will be about enabling AI functionality through an increase in ram. So if people want AI, they’ll have to get a new phone.

This is the only reason I got the 17p. My 14p was and continues to be a fine phone (now tester for my son’s app). Useful offline inference with the context of your phone is revolutionary stuff.

Sounds like that move would also be about artificially restricting features from cloud models that don't require significant local ram.

They’re introducing it because most people are short-term thinkers and would be happy in many cases (10%-25%) to lease. No matter how many times you say don’t do it.

11 Pro iPhone user…

Why did Apple wait until now though?

The biggest enemy of Apple's upgrade cycle is a rugged phone case

Because if you don't own it nothing on it is monopoly anymore. You are allowed to use it the "intended" way.

Apple is obsessed with making sure you don't have control over anything, it's really really weird. It started with "no root access for you, only us" and now this.

At the same time T-Mobile just announced they're finally going out to 36 month installment agreements on phones.

https://www.t-mobile.com/news/un-carrier/eip-flex-36

... though curiously, out of all the carriers, T-Mobile is now the first to start charging anywhere from 0% to 24% APR on their installment plans based on creditworthiness. I assume this is a signal that the era of 0% APR installments from carriers is going to start to disappear as well.

Sprint also got sued a few times over for offering leasing for cellphones - I wonder when the first lawsuits against Apple and Klarna are going to strike as well when consumers realize what they fell for.

I use Klarna all the time but I always felt that it’s more suited for fast fashion, Shein, Aliexpress etc kind of like sites. Apple giving them a huge business here selling millions of iPhones.

Makes sense here, then. Apple is primarily a luxury fashion company.

July 28th news OP;

Discussion on source: https://news.ycombinator.com/item?id=49087306

Then it is not a status symbol anymore.

Yup, exactly like luxury cars no longer are status symbols because they're leasable.

They certainly lost, status wise.

No thank you….

Apple = Landlord

You = Tenant

Stay poor, or just buy a basic phone, uninstall useless attention economy apps and live better.

> In order to lease an iPhone, you must select one of the following carriers (but you cannot use a prepaid carrier plan):

¯\_(ツ)_/¯ I suppose I'll keep buying my phones outright... no protection money to the carrier mafia == no lease.

You'll own nothing and you'll be happy.

Why are capitalists doing this? I thought it wall all CuLtUrAl MaRxIstS??

Surely the invisible hand will provide for us

What the invisible hand giveth, the invisible hand taketh.

It’s a mistake to call these capitalist things. When the government subsidizes you and bails you out with money printing fraud and government spending and no one is ever held accountable, let alone suffer any real consequences; you don’t have capitalism at all, any more than “communism” was ever actually communism.

Frankly, if you look at “capitalism” it oddly looks far more like the underlying con system of control core to “communism” than not, even if it has been far more sustainable and enduring because it is based on ideological control, not physical control.

Capitalism needs governments to work. It has throughout history. Free markets aren't synonymous to Capitalism.

Maybe a theoretical free market state can exist. But it has certainly never been tried.

Broadly, recurring models are profitable right now once you get that agreement set. People don't reason about $100/mo the same that they reason about $1000 upfront, nor do they generally consider total cost of ownership. They're bad at managing a flood of little spends in aggregate which is to the advantage of subscription models.

What you are saying essentially is the the red lentil soup is too delicious to consider.

Own nothing and be happy. Hope people don't fall for this BS. The only thing you can control is to decide where to spend your own money and time.

What about it is BS? I don't see any issue with leasing things if it does make me happier.

Ignorance is bliss.

Unfortunately, these kind of constructions leads to people getting devices that are probably not good for their budget. If you cannot pay a 1200 Euro phone, getting a 40 Euro per month phone lease is probably also not a good idea.

Before people start strawmanning, yes, we do the same for house mortgages. But a living space is essential, but more importantly, long-term the value typically stays the same or rises. So, even if you cannot afford the mortgage anymore, you can sell the house, pay back the mortgage company and keep the capital you accumulated so far.

A phone is also an essential now, but they lose value over time, and many midrange 300-500 phones are barely worse than an iPhone nowadays and will also have 6 years of monthly security updates, etc. (if you pick the right brand).

These schemes are only there to trick people who probably couldn't afford luxury products into buying them. People who can afford an iPhone, can also save up for one or buy one outright.

Using Klarna is also indicative of Apple's moral rot. They are well known in Europe for willingly getting people to buy things they can't afford (I guess similar to US credit cards) and high-interest rate loans. They are a morally bankrupt company and it's sad that Apple has sunk so far just to make the line go up.

Individually? Who cares.

Collectively? Just one more avenue of financial destruction of the middle and lower classes.

If anything, I think the terms for this are almost too good. You never end up paying more than the cost of purchasing the device outright if you decide to keep the device. And considering it can have a term of up to 30 months (24 month lease, with 6 months more before you're charged the remaining cost of the device), you've just gotten a zero percent interest loan for 30 months. That's actually cheaper than buying it outright at the start of the term due to inflation. I seriously cannot see a downside to this program on the consumer's end if they end up keeping the device.

If the customer is the sort of person that upgrades yearly then it reduces hassle: no extra effort for valuing a trade-in or selling to a third party. It affects these customers the most because they might be able to recoup more in a third party sale in exchange for effort on their part.

With the previous iPhone upgrade plan, I upgraded yearly and it was seamless. When I did have an issue where Apple did not register my return of the device, Apple executive customer support was all over things and got me fixed quickly.

I doubt “klarna” will have even 1% of the customer service that Apple provided.

The downside is that it causes people to buy phones they can’t afford because it seems cheaper. People don’t reason about $50 per month the same way they do about $1200. The mistake in your comparison is assuming the target customers were going to buy the phone anyway, when they weren’t.

What a paternalistic response. Apple provides a better deal than the typical telecom — not gouging the user on a lease-to-own program, and your response is the sheep are too dumb, best to take the option away for everyone?

If you want to fight that battle, then educate consumers. I'm all for education. Taking away reasonable options because some people aren't capable of making decisions in their own interest is the worst kind of nanny state behavior.

I think that’s a fair point, and my response wasn’t to suggest that financing is inherently a bad thing. I was replying to the question “doesn’t everyone win from this?”, and I believe the realistic answer is that no, Apple wins and financially uneducated people lose.

Oh no, I get to pay $11/month (after trading in my 15 Pro Max) with 0% interest for a new iPhone 17 and return it for another new one in a couple of years, or buy it outright at the end (and own it.) I'm such a sucker.

What happens to the whole attention economy, i.e., social media, apps, games, etc. when phones/devices become too expensive for people?

Subsidize them with phones or apps that pay them a drip of coins for their attention, maybe even a little real money.

Use camera-enabled eye tracking to say, hey, pay attention to this content, lost you there for a second, there you go, welcome back. Tap into edge LLMs to herd the user back to consuming content, since its subsidized, the budget for this goes up.

Not sure why people are so negative about this, macbooks only really last a few years under heavy use anyway and most small businesses would love to pay $100/employee/month to make sure they all have hardware they need rather than trying to manage depreciation accounting and cash flow.

Eg often hardware over $1000 gets depreciated over 5 years but employee laptops get replaced every 3 years so subscribing can have a huge positive effect on cashflow

What exactly does "heavy use" mean? My MacBook Pro is now in its fourth year of daily development work. It doesn't show any kind of wear. So far I don't see any reason to replace it in the years to come. If nothing major changes I think I'll get another four years out of it.

I’ve never replaced a MacBook because it was worn out, but because I wanted a newer, higher performance version. I have a 2018 MacBook Pro that I just can’t get rid of because it still works great.

Same here. I have my 2013 MacBook Pro still going strong. My father uses it when he visits me.

I have a seven-year-old MacBook Air that is like new and runs just as fast today as it did the day I bought it. Battery lasts acceptably and it’s a joy to use.

It occurs to me that none of those metrics include numbers.

What kind of numbers would be acceptable to you?

Many people don’t use numbers when evaluating whether their laptop is still capable. Does it last long enough? Does it lag or freeze? Can I still do my job? Then I don’t need to upgrade.

Seven might disagree.

While I agree with the general sentiment, if you're not using an Apple Silicon MacBook you're missing out.

(Sent from M1 MBA)

Untrue to say they don’t last, our M1 macs 6 years later are still very usable. However your point is very true for corporates, staff always want a refresh regardless if the laptop is good enough or not.

These personal plans make sense for people who want the latest and don’t like the hassle of reselling

> staff always want a refresh regardless if the laptop is good enough or not

My personal experience disagrees. A lot of colleagues are absolutely happy with keeping their machines for quite some time. A lot of it - believe it or not - is simply inertia. Apple has made switching MacBooks super easy but still the process of going through the migration process from one machine to the next simply isn't worth the trouble for a lot of them (and I include myself in that group as well).

If all your people are looking for is the latest and greatest gadget then you may simply have the wrong people in your team.

Mostly because IT insists that you need to start over with a fresh install.

When I last switched laptops, I just did `dd if=/dev/nvmeOldLaptop of=/dev/nvmeNewLaptop` and was good to go with the entire laptop state being replicated, compared to my colleagues who spent a week gradually copying all their stuff over, and still missing a ton. Some time later IT figured out my windows installation ID was wrong and just assumed they messed up during setup and updated their database.

No, absolutely not. There is no "IT insists" in our company. Believe it or not we trust our people to do the right thing and to handle their equipment accordingly. There are a couple of applications that are forced by the device management system but other than that: Do what _you_ think works for _you_.

>macbooks only really last a few years under heavy use anyway

What?

Small businesses won't go for this program because it isn't a true lease, it's a loan.

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