Apple has launched Apple Upgrade in the United States in partnership with Klarna, allowing consumers to lease an iPhone, Mac, iPad or Apple Watch for a monthly fee with the option to upgrade, return or eventually purchase the device. Apple CEO Tim Cook said on the company's earnings call on Thursday that the programme is intended to make it easier for customers who prefer upgrading on a regular schedule to access the latest products through a leasing plan.
The move comes as consumers hold onto smartphones for longer, driven by rising prices and incremental hardware improvements. Counterpoint Research expects the average global replacement cycle to stretch to four years in 2026, up from 3.5 years in 2025. In the US, premium smartphone owners now keep devices for an average of 42 months, according to IDC.
Analysts say leasing and guaranteed buyback programmes depend on a strong secondary market. "These programs fundamentally do not work unless a secondary market exists," said Max Weinbach of Creative Strategies. "The only way to sustain a used or refurbished market is to make sure devices enter that market, and leasing and guaranteed buyback programs make that possible."
For consumers who upgrade frequently, leasing can be financially comparable to buying outright, according to Weinbach. However, Matt Schulz of LendingTree said those who keep phones for three to five years are often better off buying them outright.
IDC's Navkendar Singh said the real driver for manufacturers is "protecting margin and retention as pricing pressure mounts." The trend is also visible in India, where BytePe reports more than 80% of customers choose subscriptions over outright purchases or traditional EMI plans.