Apple Upgrade offers the option to lease an iPhone starting at $17.99 per month.

      Apple has introduced a new solution to the criticism regarding the high price of its products: don't buy them. Lease them instead.

      On Tuesday, the company rolled out Apple Upgrade in the US, a leasing program managed by the buy-now-pay-later company Klarna. This program includes the iPhone, Apple Watch, Mac, and iPad, with leasing starting at $17.99 a month for an iPhone. It also discreetly ends the iPhone Upgrade Program that Apple has operated since 2015.

      The timing is indicative. In June, Apple increased prices for the Mac and iPad by $100, pushing them above $1,000, attributing the hikes to an AI-induced memory shortage. They also warned that iPhone price increases were on the horizon, with Cook stating that these changes were unavoidable. Six weeks later, the response is not to lower the price but rather to present it in a different format.

      The actual cost remains unchanged. However, the perception changes.

      Leasing does not reduce the cost of an iPhone; it simply alters how it feels to consumers. A $1,099 iPhone 17 Pro transforms into a monthly payment of $31.99, replacing the initial shock of the price tag with a manageable item on a bill.

      “It doesn’t lower the price of an iPhone, but it changes consumer perception by swapping sticker shock with a consistent monthly payment,” said Forrester analyst Dipanjan Chatterjee to CNET. This encapsulates the whole strategy. With limited capacity to keep raising prices, Apple is shifting how the cost is presented.

      The ownership aspect is crucial. As this is a lease, Klarna retains ownership of the device while you make payments. At the end of the lease, you have the option to upgrade, buy the device for a one-time fee, or return it. If you choose not to act, you'll transition to month-to-month payments that Apple warns "may increase," leading to an automatic purchase fee afterward.

      The fine details warrant careful consideration. Exiting a lease early or upgrading early incurs fees Apple labels as “substantial.” The device must be returned in good condition to avoid damage fees, and AppleCare is no longer included as it was in the previous program. While it offers cheaper monthly payments, it remains a rental, and WIRED reports that some critics refer to the launch as “the financialization of the affordability crisis.”

      There was a more troubling narrative before the launch. Prior to the announcement, 9to5Mac discovered code in an iOS 27 beta related to a system that could restrict a financed device over unpaid installments, limiting access to most applications.

      However, Apple addressed these concerns. “There will be no restrictions on device functionality due to missed payments,” clarified spokesperson Brian Bumbery to The Verge. Still, the lender retains power; Klarna states that three consecutive missed payments will terminate the lease and require the full balance to be paid immediately.

      Buried beneath the consumer appeal lies an issue for Apple. Users are keeping their iPhones for almost four years now, while a company dependent on upgrade cycles prefers they upgraded more frequently. A leasing model encourages returning to the store every one to two years, smoothing out the irregular, launch-driven sales that investors often find unappealing.

      It also positions Apple against carriers, who have long utilized device financing to bind customers to their wireless plans. The timing is particularly significant, with analysts anticipating that the iPhone 18 will be more expensive come September, with rumors of a foldable model priced around $2,500. Monthly payments offer a more palatable way to market a $2,500 phone.

      This shift aligns with a broader trend. Cook has been transitioning Apple into a subscription-based model for a decade, with hardware being the last aspect that consumers simply purchased outright. Now, the devices are also subject to measurable payments. Apple is set to report earnings on Thursday, marking Cook's final quarter before he assumes the role of chairman. He departs with the iPhone appearing a little more like a service and a little less like a personal possession.