Buying a new smartphone comes with many decisions. iPhone Pro or iPhone Air? “Cosmic Orange” or “Deep Blue”? Now there’s something new to add to the list: buy or rent? Yesterday, Apple announced a new monthly rental program, which will allow potential buyers to rent new electronic devices such as iPhones, MacBooks, iPads, and Apple Watches through an agreement with Klarna, the same company that facilitates monthly payments of $4 polyester under Shein.
Maybe you’re already making monthly payments for your iPhone. Since 2015, Apple has offered an “iPhone Upgrade Program” that also gives customers the option to pay for the device over time instead of in one lump sum. But under that arrangement, the monthly payments were not rent but loan installments. Missing your bill can hurt your credit and eventually lead to a nasty phone call from a collection agency, but your phone was your phone, with as many candy bars as you could crush.
Not anymore. Klarna’s program—”Apple Upgrade,” which replaces the iPhone Upgrade Program—is actually, legally, a rental. This is confusing! And it’s somewhat confusing because this isn’t how Klarna, the well-known buy-now, pay-later service, normally works: When you use Klarna for clothes from Shein or lipsticks at Sephora or an Xbox at GameStop, you pay off a credit, just like you did with the original iPhone Upgrade Program. OK if you use Klarna to buy a Samsung Galaxy telephone. But with Apple Upgrade, you’re leasing: the Mac or Apple Watch isn’t yours until the final payment is made.
There’s nothing wrong with being flexible, and there are rental models for many expensive items—cars, grand pianos, apartments. Not everyone wants or needs to own property. Many people would like to have a high-end device for a low monthly cost rather than paying for it outright; they better get a new version of the model before they even end up paying the full price.
But Apple products are personal things. They are communication devices that store your intimate photos and videos, health data and so on. The rental model puts users in the awkward position of storing all this information on a device that Apple and Klarna maintain a lot of control over. Missing three payments in a row with Klarna will responsibility return the device or pay the entire balance at once. It is also theoretically possible that Apple or Klarna could eventually block access to various features if rental payments are missed; 9to5Mac has information that the rules for such restrictions are in the beta version of the upcoming iOS 27. When I reached Apple for comment, spokesman Brian Bumbery said that “there will be no restrictions or changes to functionality due to the lack of payment,” though why iOS 27 includes these options remains to be seen. is unknown. (Klarna did not respond to a request for comment.)
The shift to renting versus owning is also a sign of a dark undercurrent in the tech industry. Thanks to the scarcity of memory chips produced by resource-hungry and unproductive The AI industry, consumer electronics are becoming more expensive around. Last month, Apple raised prices on many of its devices, citing rising memory costs. A new upgrade program will make Apple’s electronic devices look cheaper than they are.
Consider a student or young professional, or perhaps an unemployed senior, who needs a new computer. They decide on a MacBook. Apple’s upgrade will appear to be the best plan: In its adApple offers a 14-inch MacBook Pro model that retails for $1,999 but that can be obtained on a monthly lease. Maybe this person goes for a two-year term, which makes them pay $54 a month. Best Buy, which currently has the same computer on sale for $1,849, offers an 18-month loan repayment with $103 down payment. Apple’s plan looks cheap: A 24-month lease adds up to $1,296; The 18-month Best Buy loan lands at a full retail price of $1,849.
Why does a Best Buy laptop seem more expensive? It’s because the plan is designed so that you pay for the device in full. Meanwhile, at the end of a 24-month MacBook Pro lease, a consumer will still owe $703, meaning the actual price of Apple’s plan is $1,999—above Best Buy’s offer. One can choose to pay the full amount, return the device outright, or exchange it for a new one. That’s a lot of money, and so the odds are that this customer will just move on and trade, restarting the cycle in which they bleed their bank accounts to pay for a device they don’t own and probably never will. And it continues, permanently.
Apple, which reached a market value of more than 5 trillionits highest ever, on the same day it announced Apple Upgrade, it has released a plan that will earn more money from its customers than ever before. (In particular, the new plan does not include AppleCare+, like the previous iPhone Upgrade Plan, so users will have to increase the cost of the warranty or risk continuing to pay a rental fee on a device that they lose or break.) All this may feel stupid, but of course many technology companies are trying the same basic offer: At this time, I pay a monthly fee for Google, Amazon, an annual fee, Amazon or Anthropic. Nintendo for services placed on top of products that previously took little from me. Doing so gives me access to cloud storage and advanced features that will now be hard to part with. I walked into the trap myself—I even saw it coming—but I’m trapped anyway.
