Apple Launches Official iPhone Rental Programme Starting at Under £300 per Month

Apple has launched a new programme allowing customers in the United States to rent an iPhone for up to two years, with costs starting from US$17.99 per month. The scheme, called Apple Upgrade, is a partnership with buy now, pay later provider Klarna and will be available through Apple’s physical and online stores. Customers who pass a soft credit check can choose a rental period of one or two years for iPhones, with similar options available for Apple Watch, while Mac and iPad rentals are offered for two or three years. Under the scheme, the device must be returned after the 24-month term ends. Users can purchase the device with an additional payment or swap it for a new model. Apple stated the programme requires no deposit, and Klarna will not charge late fees but will terminate the contract if a customer misses three consecutive monthly payments. Monthly costs vary by model; for example, an unlocked iPhone 17 Pro is priced at US$31.99 per month on a two-year contract or US$45.99 per month for one year. However, not all products are included, with devices like the iPhone 16 and MacBook Neo excluded from the programme. The launch comes a month after Apple raised iPad and Mac prices by at least US$100, with some models seeing increases of over US$1,000. Analysts expect iPhone prices to rise this year, and the rental scheme is viewed as a way to shift consumer focus from higher upfront costs to lower monthly payments. Nabila Popal, Senior Research Director at IDC, noted that most Apple consumers in the US and other developed markets already purchase devices through instalments or trade-in programmes, suggesting more aggressive offers can be expected. Apple is seeking new ways to sell iPhones through staggered payments, a strategy investors believe can help reduce seasonal sales volatility and reliance on new product launch cycles. The programme may also encourage faster device replacement, as Bernstein estimates the average iPhone replacement cycle has now lengthened to nearly four years. Since Apple announced price increases in June, analysts have speculated about further iPhone price hikes, with Morgan Stanley estimating Apple may need to raise the iPhone 18 Pro price by around US$200 to maintain gross margins. TechInsights forecasts that rising memory and component costs could add up to US$300 per unit in production expenses. Apple is also expected to push premium device sales further, with some analysts predicting the introduction of a foldable phone alongside the iPhone 18 Pro line in September, potentially priced around US$2,500. Compared to previous programmes, Apple Upgrade offers significantly lower costs. The existing iPhone Upgrade Programme, which includes AppleCare and financing through Citizens Bank, charges customers over US$42 per month for 24 months. The new scheme will see Apple compete more directly with carriers like AT&T, Verizon, and T-Mobile, which have long offered instalment plans and trade-in subsidies to attract customers to long-term service contracts. Apple continues to offer interest-free financing through Apple Card Monthly Installments, while Apple Pay users can access short-term loans via Klarna and its competitor Affirm.