GoKawiilThe smartphone industry’s next battleground may not be the phone itself, but how consumers get it. As premium devices become more expensive, Apple, Samsung, and others are betting that leasing, subscriptions, and guaranteed buyback programs can make upgrading more attractive.
This week, Apple launched Apple Upgrade in the U.S. in partnership with Klarna, allowing consumers to lease an iPhone, Mac, iPad, or Apple Watch for a monthly fee with the option to upgrade, return, or eventually purchase the device. Samsung, meanwhile, has been offering its Galaxy Forever program in India, combining financing with a guaranteed buyback to let consumers upgrade flagship Galaxy smartphones more predictably.
On its earnings call on Thursday, Apple CEO Tim Cook said the Upgrade program is intended to make it easier for customers — particularly those who prefer upgrading on a regular schedule — to access the company’s latest products through a leasing plan. He also said Apple’s relatively high resale values make the model well suited to such plans.
The shift comes as consumers keep their smartphones for longer, driven by rising prices as tighter supplies push up memory and other component costs, and incremental hardware improvements that have kept older devices capable for longer. That has given manufacturers fewer opportunities to sell new devices while also reducing the flow of handsets into the booming refurbished market. Analyst firm Counterpoint Research expects the average global replacement cycle to stretch to four years in 2026, up from 3.5 years in 2025.
The trend is evident in the United States, where premium smartphone owners now keep their devices for an average of 42 months, up from 38 to 40 months in previous years, according to market intelligence firm IDC. That has prompted smartphone makers to experiment with leasing, subscriptions, and guaranteed buyback programs.
“These programs fundamentally do not work unless a secondary market exists,” said Max Weinbach, an analyst at Creative Strategies. “The only way to sustain a used or refurbished market is to make sure devices enter that market, and leasing and guaranteed buyback programs make that possible.”
The industry’s challenge, however, is not just to get consumers to upgrade more often — it is also to persuade them that these new ownership models make more financial sense than buying outright.
When leasing makes sense
“Leasing definitely isn’t for everyone, but it can make sense, especially for someone who upgrades often,” Matt Schulz, chief consumer finance analyst at online lending marketplace LendingTree, told TechCrunch. Consumers who keep their phones for three, four, or five years, however, are often better off buying them outright than opting for a subscription or leasing model, he said.
For those who upgrade every year or two, however, the economics can be closer than they appear. “It’s important to stress the fact this is an upgrade program that’s done via a lease, rather than just a leasing program,” Weinbach said. “The intent is that the user will turn in their device every 12 to 36 months because they intend to upgrade regardless.”
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