Just When iPhones Couldn't Get Much More Expensive, Apple Found Another Way to Make Ownership Cost Even More

Apple is shutting down new sign-ups for its long-running iPhone Upgrade Program when a replacement service called Apple Upgrade launches on July 28, according to a new Bloomberg report.

The new program, built in partnership with buy-now-pay-later company Klarna, extends device financing across nearly the full Apple product lineup for the first time.

Under the current iPhone Upgrade Program, customers could finance an iPhone and get AppleCare+ bundled in. Apple Upgrade drops that coverage.

Buyers who want AppleCare+ protection will need to purchase it separately, which increases the total cost of ownership, even though Apple is otherwise advertising it as lower than existing financing options.

How the Financing Terms Break Down

iPhones and Apple Watches fall under a 24-month payment term. iPads and Macs stretch to 36 months.

At any point during the term, customers can pay off the balance early, swap into a newer device, or simply keep what they have when the term ends. Returning the device is also an option.

Not every Apple product qualifies. The Apple Watch SE, the entry-level iPad, the iPhone 16, and the MacBook Neo are excluded from the program. Klarna will run a soft credit check during enrollment, and the program may carry additional fees depending on the buyer’s situation.

Why Apple Is Doing This Now

Apple has positioned the program around monthly payment size. With a foldable iPhone expected to arrive in September at prices likely to exceed $2,500, spreading that cost over two years is a more practical pitch than asking buyers to absorb the full amount upfront.

The 36-month Mac financing option similarly lowers the monthly figure on high-end hardware that regularly crosses $3,000.

Klarna is one of the larger buy-now-pay-later services operating in the U.S., competing directly with Affirm.

Apple’s decision to build the program through a third-party financial platform rather than through Apple Card infrastructure or its own lending operation is a notable structural shift from how it handled the iPhone Upgrade Program.

What Changes for Current iPhone Upgrade Program Customers

Anyone already enrolled in the iPhone Upgrade Program is not immediately affected. Apple is only stopping new enrollments once Apple Upgrade goes live.

Existing participants can presumably complete their current term under the old structure, though Apple has not detailed a formal transition path for those customers.

For buyers considering a new iPhone, Mac, or iPad purchase this fall, the practical decision shifts to whether lower monthly payments offset losing the built-in AppleCare+ that the old program included.

On a $1,199 iPhone 18 Pro financed over 24 months, AppleCare+ for iPhone currently runs $9.99 per month as a standalone subscription, putting that omission in concrete dollar terms for anyone running the numbers before July 28.

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