Apple's New Leasing Program Sounds Great, Until You Think About The Real Cost

Apple just launched Apple Upgrade, a new leasing program for iPhone, iPad, Mac, and Apple Watch. The whole setup is built in partnership with Klarna, and it's meant to make it easier to jump in and get the latest Apple devices without worrying about paying everything up front or even signing up for a contract with a wireless carrier. On the surface, this looks like a huge win for fans of Apple products.

Everything from the lower monthly payments, the lack of a giant upfront cost, and the option to hop into a new device whenever your lease is up are all genuinely appealing, especially if you love new tech as much as I do. Tack on the concerns around rising prices due to the ongoing RAM shortages, which have driven RAM prices to new heights. As a whole, Apple Upgrade seems like a surefire win for consumers.

However, the convenience of this system is designed to lure you in. What you don't see, what's actually hiding beneath the surface, is a plan that will not only keep you paying for your device every month, but one that consumers don't know all the details about. That's because while Apple has outlined how things will work, and you'll still be able to pay your device off at the end of the lease, there's a real possibility that the company will aggressively encourage buyers to purchase a new device, leading to a cycle of unending upgrades where you never hold onto a device for more than a year or two.

According to Apple, the upgrade program will provide iPhone and Apple Watch leases that run for either 12 or 24 months, while Mac and iPad leases will stretch to 24 or 36 months. Monthly payments start at $17.99 for iPhone, $11.99 for Apple Watch, $24.99 for Mac, and $11.99 for iPad. On the surface, this is a good deal, especially when you do the math and see that you can use one of the latest iPhones for under $450 over the course of two years. Unfortunately, the catch here is that you don't actually own the device, not yet at least.

Lease is an important word to keep in mind here, because this isn't like when you buy your phone with a monthly payment plan from your carrier. No. When you do that, you're actually paying for the phone over the course of several months with the intention of keeping it. With Apple Upgrade, that is just one of the options you'll have to choose from when your lease is up, but you can rest assured that Apple is probably going to do everything it can to convince you that it is not the best choice.

Additionally, this new program is replacing Apple's previous iPhone Upgrade Program entirely. So, this isn't just a test drive. Apple is committed to making this the new way that it does business. The mobile tech world has always been evolving — I remember the first time carriers offered month-to-month pricing for devices — and between Apple's new leasing system and Google's possible surge pricing approach with future Pixel phones, it seems consumers are on the cusp of yet another major change in how they purchase tech.

Ultimately, my biggest issue with Apple Upgrade isn't even a fault of Apple's. I can understand why the company would take this approach, especially with innovation in the mobile tech world stagnating to a point where most of the hype around new devices (at least from the company's advertising) is mostly based around new AI features. The time of groundbreaking new devices is mostly a thing of the past, so Apple has to find ways to keep its devices relevant for buyers instead of letting them enjoy a new phone and keeping it until software support runs out.

This structure, though, is one that the automotive industry has already gone through, as well as the housing market. Ever heard of rent-to-own homes? That's essentially what Apple's new upgrade program is, except once the lease is up you have the option of paying off the phone outright, turning it back in and exiting the program, or just trading in your phone for a brand new one with a new monthly payment.

Of course, you'll still be able to buy it without the lease, but that doesn't change that Apple appears to be trying to make buying your phone outright a secondary thought. Instead, it wants to convince users that always having the most up-to-date device is their best choice by making that option as easy as possible to buy into. To be honest, I'm more surprised we haven't seen this hitting the tech world earlier. Apple is just making it easier to keep up with the Joneses. It's only a matter of time until other companies follow suit.