Key Highlights
- Shares of Klarna rose 9% Tuesday following Bloomberg’s report that Apple has chosen the fintech firm to finance its upcoming Apple Upgrade device leasing service.
- Set to debut on July 28, the program will encompass most iPhone, Mac, iPad, and Apple Watch products, offering lease durations of 24 or 36 months.
- The Apple Upgrade service operates on a subscription model, allowing customers to settle early, swap for newer models, or retain their devices when the lease concludes.
- Apple plans to discontinue new sign-ups for its current iPhone Upgrade Program and traditional financing arrangements to prioritize the new offering.
- This collaboration comes after Apple abandoned its proprietary hardware subscription initiative in 2024.
A new collaboration between Apple and Klarna has been announced, introducing the Apple Upgrade device leasing platform. The news pushed Klarna (KLAR) shares up 9% during Tuesday’s trading session. Apple (AAPL) stock also saw positive movement, climbing approximately 0.82%.
The service is scheduled to become available on July 28 across U.S. markets, accessible through both Apple’s physical retail locations and its online platform.
Klarna will serve as the financing partner behind the initiative. Prospective customers must successfully complete a soft credit inquiry to qualify for the program.
The Apple Upgrade program encompasses the majority of iPhone, Mac, iPad, and Apple Watch products. Lease agreements for iPhone and Apple Watch devices span 24 months, whereas Mac and iPad leases extend to 36 months.
When the lease term concludes, participants can choose from three paths: settle the remaining balance ahead of schedule, transition to a more recent model, or retain ownership of the current device.
Legacy Programs Being Phased Out
To accommodate the rollout of Apple Upgrade, Apple will discontinue accepting new participants into its existing iPhone Upgrade Program and conventional financing solutions.
The company will market the new service as providing reduced monthly costs compared to previous offerings ā although it should be highlighted that AppleCare protection is not bundled in, which differs from the existing iPhone Upgrade Program structure.
Certain products won’t be eligible for inclusion. The Apple Watch SE, base-model iPad, iPhone 16, and MacBook Neo are omitted from eligibility. Corporate and educational acquisitions are similarly excluded.
The Strategic Choice of Klarna
Apple previously attempted to develop its own proprietary hardware subscription platform but ultimately discontinued the project in 2024. By collaborating with Klarna, Apple can deliver the leasing program while avoiding the financial exposure on its corporate balance sheet.
For Klarna, securing Apple as a strategic partner represents a significant milestone. The Stockholm-based fintech firm has been diversifying its services far beyond its original buy-now-pay-later focus.
Apple’s current market capitalization stands at approximately $4.80 trillion. The company’s P/E ratio is presently at 39.53, approaching its 10-year peak of 42.04.
Regarding insider transactions, Apple executives offloaded $87.6 million in stock over the previous three months, with zero insider purchases recorded during that timeframe.
Klarna’s stock finished Tuesday’s session 9% higher after the Bloomberg disclosure, while AAPL shares advanced roughly 0.82% during the same trading day.
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