Apple is preparing for a major expansion of device financing with the upcoming “Apple Upgrade” leasing program — and iOS 27 already contains the tools to enforce it. Code discovered in the beta reveals a new “Restricted Mode” that can limit access to most apps and services on leased iPhones if payments fall behind, while preserving essential functions like Phone, Settings, and Health. Paired with a new “Partner Finance Lock,” this system gives financing partners powerful remote controls without handing over location data.

As Apple partners with Klarna to make iPhones and other devices more affordable through longer-term leases, these findings show exactly how the company plans to protect itself from defaults.

Marcus Mendes for 9to5Mac:
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9to5Mac can now confirm that code found in the iOS 27 beta appears to reveal a broader system for managing a financed iPhone, including the ability to restrict apps and services when payments are missed…

If the contract is no longer in good standing, Apple’s system services can place the iPhone in “Restricted Mode,” which blocks access to most apps until the payment or contract issue is resolved, while keeping a small set of apps available…

The code does not appear to cancel, suspend, or otherwise modify App Store subscriptions associated with blocked apps. As a result, a subscription could continue billing even while access to its app is restricted.

Additionally, there isn’t a fixed number of missed payments that automatically triggers the restrictions. The financing provider’s app decides when to lock the device based on its own policies.

Finally, the new framework also introduces a new type of activation lock called “Partner Finance Lock,” which is meant to prevent users from erasing, reselling, or stripping a restricted device for parts.

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MacDailyNews Take: It makes perfect sense for Apple to have digital repossession capabilities for leased devices which, after all, users do not own until they are fully paid off.

If you don’t like this financing setup, buy your Apple hardware outright like normal people with basic financial sense.

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In what marks one of its most significant retail model overhauls in years, Apple is preparing to roll out a broad new device leasing initiative called “Apple Upgrade” on July 28th.

Partnering with Swedish financial tech company Klarna Group Plc, the tech giant will allow U.S. customers to lease most models of iPhones, Macs, iPads, and Apple Watches with low monthly installments, expanding hardware subscriptions far beyond its traditional phone-only offerings.

Key Details of the ‘Apple Upgrade’ Program

• Partner Bank: Klarna Group Plc (soft credit check required)

• Supported Hardware: Select iPhones, Macs, iPads, and Apple Watches

• Lease Durations
– 24 months: iPhones & Apple Watches
– 36 months: Macs & iPads

• End-of-Term Options: Upgrade early, pay off balance to own, continue monthly payments, or return device

• Notable Exclusions: Apple Watch SE, entry-level iPad, iPhone 16, MacBook Neo

• Protection Plan: AppleCare+ not bundled (available as an optional add-on)

A Broader Reach Across Apple’s Hardware Ecosystem

For over a decade, Apple’s hardware installment options were anchored by its legacy iPhone Upgrade Program, launched in September 2015 in partnership with Citizens Bank. However, that program was restricted strictly to iPhones and bundled AppleCare+ into every plan.

Under the new arrangement with Klarna, Apple aims to address softening hardware demand and recent supply-chain cost spikes by softening the upfront price tag across almost its entire lineup. Customers will no longer be limited to mobile devices; for the first time, high-end MacBooks and iPads can be structured as multi-year leases directly through Apple Stores and the Apple Online Store.

Trade-Offs and Exclusions

While the new leasing options make expensive hardware more accessible, the service is said to come with a few notable catches:

• No Bundled AppleCare+: Unlike the legacy iPhone Upgrade Program, base monthly payments on Apple Upgrade will only cover the hardware cost. Users wanting theft, loss, or damage coverage must purchase AppleCare+ separately.

• Entry-Level Exclusion: According to reports, Apple is intentionally excluding lower-priced budget devices—such as the Apple Watch SE, base-model iPad, older-generation iPhone 16, and MacBook Neo—to encourage buyers toward mid- and high-tier hardware.

• Sunsetting the Old Guard: With Apple Upgrade launching, Apple plans to stop accepting new enrollments for the original iPhone Upgrade Program, though existing members will be permitted to complete their current terms.

MacDailyNews Take: The new program arrives at a critical moment as average selling prices for consumer tech continue to rise. By framing flagship hardware purchases as digestible monthly subscriptions, Apple hopes to keep ecosystem upgrades steady despite broader macroeconomic pressures. Shifting the financing backend to a third-party partner like Klarna allows Apple to expand leasing across nearly its entire hardware portfolio without taking the credit risk directly onto its own balance sheet.

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Apple is set to roll out a major new device financing program called “Apple Upgrade,” partnering with Swedish fintech Klarna Group Plc, in a significant new option for Apple hardware customers.

The program, scheduled to launch on July 28th, will allow U.S. customers to lease most models of iPhones, Macs, iPads, and Apple Watches through Apple Stores and online. It requires only a simple credit check and is designed to address softening demand and higher device prices by offering more affordable monthly payments.

Bloomberg News reports that according to people familiar with the matter, Apple Upgrade marks one of the biggest changes to the company’s sales model in years. Lease terms will be 24 months for iPhones and Apple Watches, and 36 months for Macs and iPads. Customers will have flexibility at the end of the term: upgrade to a newer device early, pay off the balance to own it outright, keep making payments, or return the device.

The initiative builds on — and in many ways replaces — Apple’s existing iPhone Upgrade Program. By working with Klarna as the financial backer, Apple aims to spur sales without directly shouldering the full credit risk, while making premium devices more attainable as average selling prices continue to climb.

Notable details and limitations include:

• AppleCare+ is not included in the base lease (customers can add it separately).

• Certain newer models, such as the iPhone 16 series, may initially be excluded.

• Availability is currently limited to the U.S. market.

Consumer reactions have been mixed. Proponents see it as a convenient way to stay on the cutting edge of Apple’s ecosystem with lower upfront costs, while critics worry it could encourage perpetual leasing over ownership and increase long-term spending for users who frequently upgrade.

This move comes as Apple faces pressure to innovate its services and hardware sales amid a competitive landscape and macroeconomic challenges. The partnership with Klarna, known for its “buy now, pay later” services, could also expand into broader financing options in the future.
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MacDailyNews Take: The program comes on the heels of recent price increases across iPad and Mac lines driven by component cost inflation, aiming to keep monthly friction low for consumers even as average selling prices rise. Shifting the financing backend to Klarna allows Apple to expand leasing across nearly its entire hardware portfolio without carrying credit risk on its own balance sheet.

The news has boosted AAPL shares into the green.

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