Apple, Tuesday:

Apple today announced Apple Upgrade, a new product leasing program provided by Klarna for iPhone, Apple Watch, Mac, and iPad available on the Apple Store online, in the Apple Store app, and at Apple Store locations in the United States. Apple Upgrade makes it even easier for customers to get the Apple products they love with a leasing plan that is right for them.

Apple Upgrade replaces (in the United States) the iPhone Upgrade Program and iPhone Payments plan. Zero-interest monthly payments will certainly ease the sticker shock of recent price increases (and the increases expected for iPhone come September) for especially price-sensitive customers.

Apple Upgrade offers 12- and 24-month leasing options for iPhone and Apple Watch, and 24- and 36-month leasing options for Mac and iPad. Leasing prices start as low as $17.99 per month for iPhone, $11.99 for Apple Watch, $24.99 for Mac, and $11.99 for iPad.

$17.99 is for the 256GB iPhone 17e on a 24-month lease. Total leased cost would be $431.76, a $167 “saving” versus the “buy it now” $599 price—assuming you upgrade the phone in two years. Apple offers three lease-end options:

At the end of the lease term, customers can upgrade their device to the latest generation, purchase it with a one-time payment, or simply return it and exit the program.

Upgrading requires a new lease at then-current prices (and subject to then-current eligibility rules). For the purchase option, you pay the difference between “the list price minus any lease payments you’ve made” and other credits and fees—basically, the amount you “save” by leasing is also the buyout amount. The return-and-exit option means you turn in the device and walk away; you’re left without a device, but you saved money compared to buying it outright—though perhaps not as much as you might think.

One of the questions (and answers) on the Apple Upgrade marketing page is this:

What do I do if my device gets lost or is stolen?

If you have AppleCare+ Theft and Loss for your iPhone, iPad, or Apple Watch, you can file a claim at mysupport.apple.com/theftandloss.

If you don’t have AppleCare+ Theft and Loss coverage and your device is stolen or lost, you’ll need to close out your lease by paying the early termination fee or choose to pay the purchase option fee (plus any applicable taxes and fees). […]

You will continue to be charged your monthly lease payments until you either pay the early termination fee or purchase option fee. If you take no action, Klarna will continue to charge you your monthly lease payment through the extension period, and you will be charged the purchase option fee through Klarna.

Apple’s own footnote describes the “early termination fee” as potentially “substantial”—basically, you’re on the hook for whatever’s left on the lease.

Unless, of course, you have AppleCare.

You won’t find a clearer pitch for AppleCare. For iPhone, two years of AppleCare runs $200 (iPhone 17e) to $280 (iPhone 17 Pro Max). For Mac, three years is $315 to $465. In almost all cases, you still save money, and you protect yourself from those “substantial” termination or purchase fees. My guess is that even people who would never otherwise consider buying AppleCare would rather suck it up than risk being out of pocket for hundreds or thousands of dollars for a lost or stolen device. You can bet Apple Retail folks will be hammering this option hard during purchase. Look for reports on “AppleCare attachment rates” leading into next quarter’s earnings. Services!

If you plan on upgrading your device after the lease ends (and don’t mind the attendant uncertainties), the savings can be significant—especially on higher-end configurations. You can save almost a thousand dollars on a 2TB iPhone 17 Pro Max with a 12-month lease. A max-configured 16-inch MacBook Pro ($10,149) would cost only $7,787.76 on a 24-month lease. Even after adding AppleCare, you would still save over $2,051.

For many people, that substantial savings is sufficient to sway them from device ownership.

I tend to upgrade my iPhone annually, sliding older devices first into a “test”/“backup” role before handing them down to family members, so ownership is more valuable to me than potential cost savings.

I generally hold on to my Macs for longer, usually three to five years. These I rarely hand down, instead accumulating until I trade them in. Leasing may be an option for my next “main” Mac.