Apple's new Upgrade plan will not impose restrictions for missed payments; however, accumulating three missed payments could result in the termination of your lease.
Restricted Mode continues in the iOS 27 beta, but Apple states it will not apply to Upgrade payment defaults.
Apple has recently introduced its Apple Upgrade leasing plan, allowing customers to make monthly payments for an iPhone, iPad, Mac, or Apple Watch through Klarna. This program replaces the long-established iPhone Upgrade Program and extends the option beyond just phones for the first time.
However, findings by 9to5Mac in an iOS 27 beta raised worries about potential consequences for those who miss payments. The newly introduced App Managed Features system seemed capable of checking a customer's payment status and placing a financed device into Restricted Mode.
Apple has since clarified that this system will not be utilized in its Upgrade program. In a statement shared with The Verge, Apple representative Brian Bumbery confirmed that missed payments or defaults will not trigger Restricted Mode or restrict any device functionality.
According to the 9to5Mac report, Restricted Mode was anticipated to restrict access to most apps while allowing basic services like Phone, Settings, Wallet, Clock, and the App Store to remain accessible. There was also a separate Partner Finance Lock feature that could prevent users from bypassing the restriction via a factory reset or selling the device while payments are outstanding.
Apple’s statement indicates that there will be no Restricted Mode or other limitations on device functionality due to missed Apple Upgrade payments. However, the company has not clarified the purpose of the broader framework or whether it will be included in the final iOS 27 release.
Comparable systems already exist in the device-financing industry. For example, Google's Android DeviceLockManager allows finance companies to lock devices following missed payments, while Samsung’s Knox Guard provides banks and carriers with tools to restrict devices over overdue payments.
Missing three consecutive payments can still lead to lease termination.
The Apple Upgrade program functions as a lease rather than a standard installment plan. Klarna retains ownership of the device during the lease term, and customers have the option to return it, upgrade, or pay a final fee to keep it once the lease concludes. Klarna informed The Verge that missing three consecutive payments will result in the termination of the lease, requiring the customer to pay the entire outstanding balance.
Thus, while Apple will not prevent customers from accessing their apps, falling behind on payments can still terminate the agreement and necessitate immediate payment of the remaining balance. It remains unclear how Klarna will enforce this policy.
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Apple's new Upgrade plan will not impose restrictions for missed payments; however, accumulating three missed payments could result in the termination of your lease.
Apple states that missed payments on its Klarna-supported Upgrade plan will not limit app access or device functionalities; however, three consecutive missed payments may result in the termination of the lease.