GoKawiilApple doesn’t appear to be interested in making its increasingly expensive devices cheaper. Instead, it may make the price easier to ignore.
The company plans to launch Apple Upgrade, a Klarna-backed leasing program for most iPhones, iPads, Macs and Apple Watches, on July 28 in the US, according to a Bloomberg report.
The reported leasing program comes less than a month after Apple raised prices across much of its hardware lineup, blaming a global shortage of memory and storage chips. The MacBook Air jumped from $1,099 to $1,299, while the iPad Air went from $599 to $749.
Apple isn’t exactly coming off a bad quarter, either. In its latest earnings release, the company called it its “best March quarter ever,” reporting $111.2 billion in revenue for the three months ended March 28, up 17% from a year earlier. It also posted nearly $29.6 billion in net income during the same period, according to Apple’s financial statements.
That makes Apple Upgrade look less like a lifeline for a struggling company and more like a way to protect sales without reversing those price increases. A $1,299 MacBook Air is still a $1,299 MacBook Air, but framing it as three years of payments makes the price easier to swallow.
That strategy could be especially effective at a time when more Americans are borrowing and using credit to purchase, and the majority of households don’t have much cash to fall back on. Applications for new credit reached their highest rate in nearly five years in June, according to the Federal Reserve Bank of New York. A separate Federal Reserve survey found that 37% of adults would need to borrow money or sell something to cover a $400 emergency expense.
That’s the trick behind buy now, pay later — you don’t have to afford the thing, just the first payment.
A lower payment isn’t a lower price
Apple Upgrade would function more like a car lease than the company’s current financing options. Customers could upgrade early, return the device at the end of the agreement, or pay the remaining balance to keep it. Some of those choices could carry additional fees.
The reported lease terms are 24 months for iPhones and Apple Watches and 36 months for Macs and iPads. Enrollment would require a soft credit check, and the program would be offered through Apple’s website and retail stores.
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