Apple’s latest move isn’t wrong—the barrier to entry has indeed dropped. It’s just that the lowered barrier applies to your wallet, not your willingness to spend.

Zhang Wei, a product manager at a startup, has been making do with a seven-year-old MacBook Pro that now roars like a jet engine. One day, while browsing the news, he stumbled upon the announcement for the new 14-inch MacBook Pro, priced at $1,599.

Just as his finger hovered over the trackpad, ready to click, he spotted a line of small print at the bottom of the page: “Starting at $39 a month.”

“$39?” he mused, noting that it was less than his monthly coffee budget. But then, a nagging thought crept in: after three years, who would really own this laptop?

Apple recently provided an official answer to that very question.

Multiple media outlets have reported that Apple is set to launch a hardware upgrade program, dubbed Apple Upgrade, in the U.S. as early as July 28. Unlike the 2015 iPhone-only “Annual Upgrade Program,” this new iteration includes Macs, iPads, and Apple Watches, in partnership with Swedish fintech company Klarna.

Users are presented with a straightforward choice: pay monthly, then either return the device, upgrade to a newer model, or buy out the current one at the end of the rental period.

Apple touts this as “cheaper than installments.” But is Apple Upgrade truly a “good deal”?

01

THE TRUTH

Are Users Really Getting a Bargain?

According to Apple: “Lower monthly payments, lower barriers—you get the latest devices for less upfront.”

But the numbers tell a different story.

Take a $999 MacBook Air. At $39 a month over 36 months, the total spending clocks in at around $1,404—40% more than buying it outright. Even if you upgrade at 24 months and return the old device, the premium paid for “always-new” technology already exceeds the device’s depreciation rate.

$999

One-time payment for MacBook Air

~$1,404

$39/month × 36 months (40% extra)

“Apple Upgrade doesn’t sell affordability—it sells the relief of not paying all at once. It lowers psychological barriers, not total ownership costs.”

The iPhone example sheds further light on this.

The current iPhone Upgrade Program bundles device costs with AppleCare+, totaling nearly $50/month. The new plan drops insurance, making monthly payments seem more attractive—until your screen cracks or motherboard fails, requiring separate coverage. For Apple, AppleCare+ is high-margin; for you, it’s a hidden pitfall once removed from the package.

Behavioral economics has long established that people tend to spend more with credit cards than cash because the “pain” of payment is delayed. Monthly payments take this to an extreme—you barely feel the spending, only the upgrades. By the time the three-year bill arrives, the extra cost has already been paid.

Looking at a three-year horizon clarifies this further. A one-time $999 MacBook Air costs roughly $333 annually. Monthly payments with rolling renewals cost around $468 yearly. Over twelve years, the former buys four devices for $4,000; the latter spends $5,600+ with no end to payments in sight. Devices age, but monthly fees don’t.

Usage patterns matter, too. If you keep a phone for four years, buyout costs become negligible over time—monthly plans, however, drain money continuously. Apple Upgrade only benefits those who crave frequent upgrades and never miss payments.

A more subtle issue is the credit nature of “buy now, pay later.” Klarna’s model relies on installments and occasional late fees, with U.S. regulators increasingly scrutinizing such practices. Turning “buying a computer” into “borrowing money for it” risks trapping cash-strapped users. Low-income consumers, lured by “low monthly payments,” are most vulnerable to fees and interest.

The simple conclusion: if you plan to upgrade every 2-3 years without fail, the plan might ease your mind. But if you want to save money, buying outright is almost always cheaper.

02

WHY NOW

Why Is Apple Doing This?

To understand Apple Upgrade, one must first grasp the pressures Apple faces.

In early 2026, the global memory chip market surged. DRAM contract prices tripled from January to June 2026 alone, with NAND flash memory following suit. No company was spared—not even Apple.

For years, Apple leveraged its massive purchasing power and brand strength to weather supply chain cost fluctuations. But by 2026, Bloomberg reports, Apple had exhausted its stockpile of low-priced chips and now pays market rates for new orders.

This directly impacted pricing—this spring, Apple raised Mac and iPad prices significantly, with some models jumping over 20%. Media reports suggest the iPhone 18 Pro, launching in September, will likely cost more too.

Recently, Apple CEO Tim Cook admitted to The Wall Street Journal that Apple faces “unsustainable cost pressures.” Raising prices became unavoidable.

The reality is stark: without price hikes, profit margins would collapse. Even Apple, with its vast resources, had to act.

But price hikes alone aren’t enough—Apple needs new growth drivers. Apple Upgrade is its answer: using the perception of $39/month affordability to offset the sting of $200 price increases.

Commercially, this isn’t novel—the auto industry has leased vehicles for decades, and carrier contract phones are old news. Yet Apple’s timing—expanding leasing beyond iPhones to all devices while partnering with Klarna instead of handling financing itself—reveals urgency.

Partnering with Klarna lets Apple avoid bad debt, risk management, and resale value challenges—all low-margin, high-risk tasks. Offloading these to Klarna frees Apple from a heavy burden.

“Klarna funds it, manages risk, handles defaults; Apple provides products, channels, and branding. One handles heavy assets, the other stays light—Apple’s calculations are crystal clear.”

03

THE UPSIDE

What Apple Gains from Apple Upgrade

Traditionally, buying an Apple device was a one-time transaction—once paid, your relationship with Apple ended. Now, with Apple Upgrade, that relationship continues—monthly payments keep you tied to Apple.

Apple tells you: for a small monthly fee, your devices stay current, your services stay connected. You barely notice the spending, only the “new Apple experience.”

“Your monthly dollars quietly build Apple’s new business.”

This design benefits Apple substantially—smoother revenue streams, loyal users, and control over used device recycling, refurbishment, and resale. Apple now dominates the entire ecosystem.

The ultimate winner? Apple. Even in refurbishing, Apple sells officially restored devices at near-new prices, pocketing the difference as new profit.

Capital markets love this story—“subscription companies” get better valuations. Apple can even brand Apple Upgrade as eco-friendly, boosting its reputation.

But Is It Perfect?

Is Apple Upgrade’s business model truly flawless? Not necessarily.

In many Western markets, regulators scrutinize bundled services—Apple has faced fines before. In China, where credit-based installment plans are already mature, Apple Upgrade loses its edge. Its absence in China—due partly to Klarna lacking a Chinese payment license—suggests cultural and regulatory hurdles.

Apple isn’t the first to try this—Samsung and carriers have offered bundled hardware-service plans, but most fizzled. If Samsung and carriers couldn’t make it work, Apple’s success isn’t guaranteed.

Returning to the young man: he closed the page, not because he crunched the numbers, but because he realized the $39 monthly payment hid a design that hoped he’d never “buy out” or leave.

“Apple wasn’t wrong—the barrier is indeed lower. It’s just that the lowered barrier applies to your wallet, not your willingness to spend.”

What about you? Do you prefer buying outright, or have you grown dependent on installments?

Note: Zhang Wei’s name is real.

END