For over ten years, Apple's iPhone Upgrade Program helped users afford the newest models, bundling AppleCare to boot. It's on borrowed time now, with the Apple Upgrade pay-as-you-go plan imminent.
The report of the new Apple Upgrade program arriving on July 28 seems like a good deal for consumers wanting more than an iPhone. However, it also means the end of a similar installment program.
Tuesday's Bloomberg report on the launch of Apple Upgrade adds that it will effectively replace other existing installment plans on Apple's hardware payments roster. That includes the iPhone Upgrade Program.
It won't be an immediate shuttering of the iPhone Upgrade Program, as customers already on it can continue to do so for the duration of their arrangements. It will, however, not be available to new users, forcing consumers to Apple Upgrades instead.
To consumers, it looks like the switch is mostly beneficial, minus AppleCare not being included anymore. Installment plans will be provided on a wider variety of hardware, with Macs and iPads alongside iPhones. Plans will last 24 to 26 months, depending on the product, and they can upgrade early to newer models if they wish.
Launched in September 2015, the iPhone Upgrade Program was a way for consumers to get the premium-priced iPhone at a more manageable monthly cost. Rather than being provided by a carrier, it was a first-party upgrade program marketed by Apple directly.
Under the program, consumers got an iPhone that was covered under AppleCare+ with Theft and Loss, and unlocked to work with their choice of carrier.
The monthly fee also meant consumers could upgrade to the latest model of iPhone each year. Users would be eligible after paying for 12 months, and would trade in their current iPhone to start a new plan.
While Apple Upgrades gives users more choice on what they can purchase, it does mean a change in lending provider.
Apple has operated the iPhone Upgrade Program with Citizens One financing it all in the United States. In other regions, it was handled by other partners, such as Barclays in the United Kingdom.
The new Apple Upgrades program will instead be financed by Klarna, a well-known installment plan provider. While there is no immediate advantage to Apple, since it continues not to bear the risk of financing the program, there will be one down the road.
Klarna operates in 26 countries around the world, including the United States and Canada, a large number of countries in Europe, and Australia and New Zealand.
When Apple inevitably expands the program into other territories, the existing connection with Klarna should make the rollout smoother. With Klarna's existing global footprint, that means it could spread into more countries.
