Apple Launches iPhone, iPad Rental Program

Apple has introduced a new leasing program called Apple Upgrade, allowing customers to pay a monthly fee for an iPhone, Apple Watch, Mac, or iPad instead of purchasing the device outright. The program is run in partnership with buy-now-pay-later firm Klarna and is now live on the Apple Store online, in the Apple Store app, and at physical Apple Store locations.

The leasing plans offer 12-month and 24-month options for iPhone and Apple Watch, while Mac and iPad come with 24- and 36-month terms. Monthly payments start at $17.99 for iPhone, $11.99 for Apple Watch, $24.99 for Mac, and $11.99 for iPad. Customers can lower these payments further by trading in an existing device through Apple Trade In, and those who pay using an Apple Card earn 3 percent Daily Cash back on their monthly instalments.

According to Karen Rasmussen, Apple's vice president of the Apple Store online, the company wanted to give customers a more flexible way to pay for its products both online and in-store. The program has launched in the US for now, and the India rollout is not known yet.

To rent products from Apple, applicants go through a soft credit inquiry that does not affect their credit score, and Apple says approval from Klarna typically comes within minutes. In-store customers can walk out with their device immediately, while online orders can be shipped or picked up in-store. Devices come with Apple's Personal Setup service to help customers configure them.

However, customers do not own the device at any point during the lease unless they eventually pay it off in full. At the end of a lease term, users can upgrade to a newer model, buy out the device with a lump sum, or return it and exit the program altogether. Ending a lease early can trigger substantial fees, and if a leased device is lost, stolen, or returned in poor condition, customers may be charged for the damage since insurance is not bundled into the plan.

With Apple Upgrade now live, Apple has discontinued its older iPhone Upgrade Program and iPhone Payments option. Customers currently enrolled in the iPhone Upgrade Program will be offered a choice between switching to Apple Upgrade, financing through Apple Card Monthly Installments, paying outright, or opting for financing through their carrier.

Certain devices remain excluded from the new leasing scheme entirely, including the iPhone 16, iPhone 16 Plus, Apple Watch SE, MacBook Neo, Mac mini, iPad (A16), and Studio Display. Not everyone qualifies for Apple Upgrade, as applicants must be at least 18, hold a valid Social Security number or individual taxpayer identification number, and have an Apple Account and Klarna Account in good standing, among other requirements.

For iPhones specifically, customers must select an eligible carrier plan from AT&T, T-Mobile, or Verizon, and cannot use a prepaid plan. The introduction of Apple Upgrade marks a significant shift in the way Apple offers its products to customers, providing more flexibility and options for those who may not want to purchase a device outright.

The program's impact on the tech industry and consumer behavior remains to be seen, but it is clear that Apple is committed to providing innovative solutions to its customers. As the program rolls out in the US and potentially in other countries, including India, it will be interesting to see how customers respond to the new leasing options.

In conclusion, Apple's new leasing program, Apple Upgrade, offers customers a more flexible way to pay for its products, with monthly payments and the option to upgrade or buy out the device at the end of the lease term. While the program has its limitations and exclusions, it marks an important development in the way Apple offers its products to customers.