Apple’s new U.S. leasing program, launched this week in partnership with Klarna, marks a notable shift in how the company wants consumers to pay for its devices. The program, called Apple Upgrade, lets customers lease an iPhone, Mac, iPad, or Apple Watch for a monthly fee with the option to upgrade, return, or eventually own the device. On its earnings call Thursday, CEO Tim Cook said the plan is aimed at customers who prefer upgrading on a regular schedule, and he pointed to Apple’s relatively high resale values as a key reason the model works.
The launch comes as the average smartphone replacement cycle stretches to four years in 2026, up from 3.5 years in 2025, according to Counterpoint Research. In the U.S., premium phone owners now hold onto their devices for an average of 42 months, up from 38 to 40 months in prior years, per IDC. Rising component costs and incremental hardware improvements have made older devices more capable for longer, giving manufacturers fewer reasons to sell new ones and reducing the flow of handsets into the refurbished market.
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Samsung has been running its Galaxy Forever program in India, which combines financing with a guaranteed buyback to make flagship upgrades more predictable. And a wave of startups, including BytePe in India, Raylo in the UK, and Grover in Germany, have built businesses around leasing smartphones and other electronics on monthly plans.
The economics of leasing vs. buying outright
Whether leasing makes sense depends almost entirely on how often you upgrade. Matt Schulz, chief consumer finance analyst at LendingTree, told TechCrunch that leasing “definitely isn’t for everyone,” but it can be a good fit for people who upgrade frequently. Those who keep a phone for three, four, or five years are usually better off buying outright.
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For annual or biennial upgraders, the math can be closer than it appears. Max Weinbach, an analyst at Creative Strategies, said Apple’s program is designed as an upgrade vehicle, not just a lease. “The intent is that the user will turn in their device every 12 to 36 months because they intend to upgrade regardless,” he told TechCrunch. His analysis suggests frequent upgraders could pay roughly the same—or sometimes less—than they would by buying and trading in, particularly on higher-storage models whose trade-in values often lag their purchase prices.
The catch is that leasing programs only work if a strong secondary market exists. “These programs fundamentally do not work unless a secondary market exists,” Weinbach said. “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.”
Why manufacturers are pushing subscriptions
The shift isn’t just about affordability. It’s also about protecting margins and keeping customers inside brand ecosystems as devices get pricier and replacement cycles lengthen. “The real driver isn’t shorter upgrade cycles; it’s protecting margin and retention as pricing pressure mounts,” Navkendar Singh, associate vice president of devices research at IDC, told TechCrunch.
Carrier financing has long dominated U.S. smartphone purchases, with interest-free 36-month plans and trade-in offers of up to $1,100 helping Apple and Samsung control more than 80% of the market, according to IDC. But phone makers are increasingly trying to own that customer relationship directly, rather than leaving it to carriers.
IDC’s Nabila Popal expects Apple’s Upgrade program to have a bigger impact on Mac sales than iPhones, noting that U.S. consumers are already accustomed to carrier financing for phones. For Macs, however, the program opens a new financing avenue that could expand the market.
What this means for consumers
For buyers, the growing number of leasing and subscription options adds flexibility—but also complexity. The key question is how long you plan to keep your device. If you upgrade every year or two, a lease can be a convenient way to always have the latest model without managing trade-ins. If you tend to hold onto devices for three years or more, buying outright remains the more economical path.
The trend is also creating opportunities for startups. BytePe, which offers subscription-style plans for smartphones in India, says more than 80% of its customers choose subscriptions over outright purchases or traditional EMIs. Founder Jayant Jha told TechCrunch that his typical customers are young professionals in their first or second jobs who want premium devices without a large upfront payment.
Counterpoint’s Tarun Pathak expects leasing initiatives to become more common in the premium segment, though he believes traditional financing will remain the more important tool for affordability. “The primary objective is to increase customer lifetime value by improving retention, creating predictable upgrade cycles and securing a steady pipeline of trade-in devices for certified refurbishment and resale,” he told TechCrunch.
Outright ownership isn’t going away, though. Mandeep Manocha, co-founder and CEO of Cashify, an Indian trade-in and refurbishment platform, expects all three models—leasing, subscriptions, and outright purchase—to coexist. “All three business models have a place to exist, and they will continue to do so,” he said. “There is a natural transition that may happen from complete ownership to leasing, but it’s a long journey.”
