Apple discontinues the iPhone Upgrade Program and replaces it with Apple Upgrade: Why is the actual cost higher?
Apple discontinued the iPhone Upgrade Program and switched to the Apple Upgrade model. Although the listed starting price is lower, the actual total cost for users has increased.
Apple has officially stopped accepting new customers for its iPhone Upgrade Program—a purchasing model that was considered the most convenient and optimal for iPhone users for nearly a decade. To replace this model, the company launched the Apple Upgrade program through a partnership with financial partner Klarna. While offering seemingly more attractive starting monthly payments, the new policy significantly increases the actual cost for consumers who want to maintain the same level of device protection.
The Apple Upgrade model expands the ecosystem but increases complexity.
Launched in 2015, the iPhone Upgrade Program was designed to simplify the process of upgrading to a new phone each year. Customers only need to pay a fixed monthly fee that includes the device's value and the extended AppleCare+ warranty (later adding protection against theft and loss). After 12 payment installments, users can upgrade to the latest iPhone model without worrying about trade-in value or carrier procedures.
In addition, a notable new feature of Apple Upgrade is its broader applicability. The program is no longer limited to iPhones but extends to the entire hardware ecosystem including Macs, iPads, and Apple Watches, demonstrating the company's ambition to standardize its device leasing model.
However, this change inadvertently made the registration process more complicated. Customers were required to choose a network provider during registration, even though the device they received was actually an unlocked international version. Furthermore, separating the warranty service from the fixed monthly fee made the cost calculation less transparent than before.
Breaking down the numbers: Starting price decreased, but the actual total cost increased.
From a marketing perspective, the Apple Upgrade program generated significant buzz with the announcement of installment payments starting at just $32.99 per month for the iPhone 17 series — significantly lower than the previous iPhone Upgrade Program's $42.41 per month. However, this nearly $10 per month difference is essentially just a pure lease-purchase cost for the hardware and completely excludes the AppleCare+ protection package.
To enjoy the same comprehensive protection benefits as the previous program, users are now required to purchase the separate AppleCare+ plan for $11.99 per month. Adding these two amounts together, the actual monthly cost for users reaches $44.98 — $2.57 more per month than the previous program.
| Comparison criteria | iPhone Upgrade Program (Old) | Apple Upgrade (New) |
|---|---|---|
| Monthly hardware installment fees | AppleCare+ is included. | $32.99/month |
| AppleCare+ add-on fee | 0 USD (integrated) | $11.99/month |
| Total monthly cost (including warranty) | $42.41/month | $44.98/month |
| Total cost for the first 12 months | $508.92 | $539.76 |
| Scope of application of the device | iPhone only | iPhone, Mac, iPad, Apple Watch |
Specifically, considering the first 12 months—the most common upgrade cycle—the total amount users pay under the Apple Upgrade program reaches $539.76. In contrast, the figure under the previous program was only $508.92. This difference of $30.84 clearly demonstrates the company's pricing strategy.
Apple's strategic move and its impact on users.
By separating AppleCare+ from the monthly fee, Apple created a significant marketing advantage, offering a competitive price of $32.99 per month to stimulate demand. Separating the additional service packages makes the product price seem more accessible while optimizing revenue from bundled warranty services.
For existing iPhone Upgrade Program participants, Apple confirms their benefits will not be immediately affected. Existing users will continue to maintain their current policy until they complete 24 payment installments or make their next upgrade. However, for all new buyers wishing to pay in installments directly from the manufacturer, the Apple Upgrade is currently the only option.
