Apple has launched a leasing program in the United States called Apple Upgrade, developed in partnership with Klarna, allowing consumers to pay a monthly fee for an iPhone, Mac, iPad, or Apple Watch with the option to upgrade, return, or eventually purchase the device — a move that comes as the average global smartphone replacement cycle is expected to stretch to four years in 2026, up from 3.5 years in 2025, according to analyst firm Counterpoint Research.
Apple CEO Tim Cook, speaking on the company's earnings call Thursday, said the Upgrade program is intended to make it easier for customers 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 arrangements.
Samsung has been running a comparable initiative in India, called Galaxy Forever, which combines financing with a guaranteed buyback to let consumers upgrade flagship Galaxy smartphones on a more predictable timetable.
The programs reflect a broader industry reckoning with lengthening ownership cycles. In the United States, premium smartphone owners now keep their devices for an average of 42 months, up from 38 to 40 months in prior years, according to market intelligence firm IDC. Rising component costs, tighter memory supplies, and incremental hardware improvements that have kept older devices functional longer are all contributing factors.
The economics of leasing, however, depend heavily on how often a consumer upgrades. Matt Schulz, chief consumer finance analyst at LendingTree, told TechCrunch that consumers who hold onto phones for three, four, or five years are often better off buying outright. Those who upgrade every year or two may find the math closer than it appears.
Max Weinbach, an analyst at Creative Strategies, told TechCrunch that consumers who already replace their phones frequently could pay roughly the same — or in some cases even less — than they would by buying a device outright and trading it in later, particularly on higher-storage models whose trade-in values do not always reflect their higher purchase prices.
"These programs fundamentally do not work unless a secondary market exists," Weinbach said. "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."
For manufacturers, the calculus extends well beyond upgrade frequency. Navkendar Singh, associate vice president of devices research at IDC, told TechCrunch that the real driver is protecting margin and retention as pricing pressure mounts, with brands increasingly trying to convert costly one-time purchases into predictable monthly payments that keep customers within their ecosystems.
Carrier financing has long served a similar function in the United States. Nabila Popal, senior research director at IDC, told TechCrunch that interest-free 36-month financing and aggressive trade-ins of up to $1,100 have made the U.S. the region with the highest smartphone average selling prices. Apple and Samsung together hold more than 80% of the U.S. smartphone market, per IDC.
The trend is drawing startups as well. BytePe, which offers subscription-style plans for smartphones and consumer electronics in India, said more than 80% of its customers choose subscriptions over outright purchases or traditional installment plans. In Europe, the UK's Raylo and Germany's Grover have built businesses around leasing devices through monthly plans.
Tarun Pathak, research director at Counterpoint Research, told TechCrunch that such initiatives are expected to become more common in the premium segment, though he believes financing will remain the more important tool for improving affordability overall.
Outright ownership is unlikely to disappear. Mandeep Manocha, co-founder and CEO of Indian smartphone trade-in platform Cashify, told TechCrunch that all three models — leasing, subscriptions, and purchases — have a place and will continue to coexist.
Popal expects Apple's Upgrade program to have a larger impact on Mac sales than on iPhones, saying the offering is more likely to expand financing options than to fundamentally change how Americans buy their next smartphone — signaling that the shift in ownership models may be a gradual one, even as the industry's financial incentives continue to accelerate in that direction.
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