Apple Retires iPhone Upgrade Program for Klarna-Backed Leases

[DEMinSoCAL]

Its not "entitled rich", its called being "financially educated" and "financially responsible".

It absolutely is. The perspective of many here is that "I can easily afford to spend $5000 on a MacBook and if you can't then you're a peasant and financially struggling". Sounds like entitlement to me.

It'd be nice if people just discussed the Upgrade plan instead of feeling the need to "financially educate" people.

 

[Lounge vibes 05]

I guess I’m old school, because I learned to save up for the things I want, starting with an Atari 2600 I bought with paper route money when I was 12. I saved up for 2 years for my latest laptop.

Respectfully, I don’t think you can compare a game console from 40 years ago to something that’s pretty much necessary for anyone going to school, even most high-schools require students to have some type of laptop or tablet at home.
Also, this goes without saying, but cost of living versus wages in the 80s are completely different from the 2020s.

 

[sw1tcher]

Klarna is not charging a fee for the leasing program

That cannot be true. It has to be a mistake. I was told repeatedly that there would be interest since Klarna "is in the business to profit off customers" and that they're "a money making operation".

Are you telling me they were wrong?

Where does this say it's a zero percent interest loan? Klarna is in the business to profit off customers who sign up for this upgrade program.

Klarna is a money making operation, right?

I'm not sure why folks think they aren't making money off you somehow if you use their "services".

There's definitely interest involved in the new program. No business is offering 0% interest loans these days.

 

[johnduggins]

At least in my situation (iUP and upgrade nearly every year), the cost is a wash. It's a little bit less for the 12 month term but not substantial. What I don't know is what will the device configuration be compared to the iUP or outright ownership.

If Klarna will have an MDM profile on the phone to remotely wipe or to perform other leasing administrative tasks, I wouldn't participate. If it comes out of the box like a purchased phone ready for activation with no other add-ins/configurations, and otherwise functions likes a purchased phone, I may consider.

 

[Biro]

"You will own nothing and be happy with it." - literally every corporation including Apple now.

This is what I wrote when the new plan was first leaked. But I was promptly told it wasn’t a lease. And yet here we are.

 

[DEMinSoCAL]

That cannot be true. It has to be a mistake. I was told repeatedly that there would be interest since Klarna "is in the business to profit off customers" and that they're "a money making operation".

Are you telling me they were wrong?

I have no idea, but it's possible that Apple is paying Klarna something for each plan instead of Apple carrying the debt themselves. So Apple gets paid upfront from Klarna and Klarna gets paid by Apple.

 

[jarman92]

The people that will probably do this are the people who are struggling financially, and will end up paying more in the long run.

Oh absolutely. But is it any different than that same person putting it on a credit card? It's probably less financially stupid, actually.

 

[Grayburn]

We have Klarna in the UK why didn't we get this

We (The UK) get the option of Creation or PayPal credit instead now, used to be Barclays Finance for the upgrade program.

Don't care who provides the financing its worked well for years.

 

[crisss1205]

They invented it in their head. None of the 3 carriers even do contracts anymore for consumer accounts. They are all month to month.

Where did you read that the required plan needed to be on a contract? I didn't read that, and don't see any reason why it would be since the carriers aren't subsidizing these phones. If you want a cheaper plan elsewhere, sign up with one of the big three, and port out in a month.

 

[HylianKnight]

This reads like Apple was seeing an increasing default rate in their program so they found a desperate bag holder for when the crash happens.

Maybe, but the iPhone upgrade program was a loan through Citizen, so Apple shouldn’t have been left “holding the bag” in the case of defaults

 

[crisss1205]

One of the big three, prepaid not supported i.e., contract.

That is not what a contract means. If it is not pre-paid, then it is postpaid. Contract plans are completely different and have not existed with the 3 carriers in years.

 

[Biro]

I guess I’m old school, because I learned to save up for the things I want, starting with an Atari 2600 I bought with paper route money when I was 12. I saved up for 2 years for my latest laptop.

How about your car and house?

 

[DEMinSoCAL]

Good to know about this program. I prefer to pay full amount outright when purchasing a device. But good to have various purchase options for customers. Don't think this program will be available outside US anytime in the near future.

Nice to see someone gets it. 👍

 

[eruruu]

Looks like you can do engraving on your leased iPad

 

[Nekronos]

Still don't really like this. For Watch, it seems kind of silly to finance payments like that and then expect a balloon payment of well over $100 at the end of the lease. Though thinking about that a little more, for Watch specifically it may make sense to lease and return considering the battery life.

For the Mac, it seems like just another way to justify Macs being the price of used cars.

The total paid if purchasing at the end of the lease is 100% the same as as a regular purchase. So tell me, how is it silly to "expect" a balloon payment at the end of a lease when deciding to keep the device and pay the remainder as opposed to "expecting" a balloon payment immediately when you purchase outright?

 

[crisss1205]

How about your car and house?

Back then they were able to buy a car with 3 months salary and a house for 1 years salary.

 

[hovscorpion12]

For those on the iPhone upgrade program who enjoy yearly upgrades, you would need to select the 12 month plan. Otherwise, by default you can select the 2-year plan.

 

[hovscorpion12]

Back then they were able to buy a car with 3 months salary and a house for 1 years salary.

Yeah. Back in 1950 when a car was $10,000 and a house was $50,000.

 

[zilchfox]

That cannot be true. It has to be a mistake. I was told repeatedly that there would be interest since Klarna "is in the business to profit off customers" and that they're "a money making operation".

Are you telling me they were wrong?

Klarna makes the money with the device that’s either returned, or it’s a wash with the balloon payment at the end. Klarna owns the device unless the customer submits enough payments to buy out the lease, so they are banking that they will return the device.

An iPhone 17 Pro after 24 months of leasing is a total payment made by the customer of $767 for an iPhone that was worth $1099. At the end of the lease when the customer returns the iPhone, they now have both the iPhone (whatever it’s still worth, let’s just say $900 after depreciation) AND the $767 in money from the lease. That’s $1667 in total value now in Klarna’s hands, and that’s all without any fees or interest, too, so that’s $568 in profit to Klarna. And if the customer decides to pay off the iPhone to eventually own it, then it’s simply a wash for Klarna.

 

[DEMinSoCAL]

The total paid if purchasing at the end of the lease is 100% the same as as a regular purchase. So tell me, how is it silly to "expect" a balloon payment at the end of a lease when deciding to keep the device and pay the remainder as opposed to "expecting" a balloon payment immediately when you purchase outright?

Even better, if you know you're going to want to keep it, just make bigger payments each month so there is no "balloon payment" at the end. Stretching out that balloon payment over 24-36 months and adding it to your minimum payment makes sense.

 

[jonnyb098]

Yeah, things have changed in 50 years and paper routes barely exist. Meanwhile, here we are in 2026.

Yeah they have changed. Everyone now thinks they are entitled to the newest phone, truck, TV, etc and institutions are cashing in on the financial illiteracy of the average person.

 

[jmislansky]

I'm confused. This seems like a bad deal for me? I'm currently on the iPhone 17 Pro Mac 256GB and I pay through Apple Card monthly installments and trade my old phone in every year. This one was $1199 minus $700 trade-in so I'm paying $499 over 12 months. $20.79/month and then another $250 at the end to pay the rest off so I own the phone and can upgrade. That's akin to $41.58/month. This new plan says I can get the phone for $49.99/month and then upgrade. So it's $8 more a month if I lease it than if I buy it outright and trade it in? Now sure the trade-in value could go down or I could damage the phone, but as long as I'm getting the phone for less than $600, it is cheaper to do what I've been doing instead of leasing it. Anyone else feel the same?

 

[Biro]

Back then they were able to buy a car with 3 months salary and a house for 1 years salary.

Not most people.

 

[DEMinSoCAL]

Yeah. Back in 1950 when a car was $10,000 and a house was $50,000.

Not even that much. I was watching a clip of a "The Price is Right" game show from 1985 on YT and a Volkswagen Super Beetle had a retail price of almost $2800 (which the contestant did win).

 

[jonnyb098]

This couldn’t be further from the truth. An electronic device is a depreciating asset. Leasing a depreciating asset while you keep your money invested or making interest is smart financially. And especially when you can lease for 0% interest….. why would I take $1200 out of an account making returns to pay for a phone up front, when I can keep most of that money working for me and lease the phone for 0%.

Yeah.... except 99% of people will never do what you just said. They are financing their door dash. That's the average schlep. 2/3 of Americans are living paycheck to paycheck both rich and poor. People just suck with money, period.