[nerdjon]

The math for the new program is kinda perplexing, my guess is that they are hoping that most people just will send in the device and upgrade.

If I am reading the FAQ here properly: https://www.apple.com/shop/apple-upgrade.

> If you decide to buy the device, the purchase option fee is the list price minus any lease payments you’ve made minus any remaining discounts or trade-in credit. (excluding tax and any damage fees).

Lets look at a couple examples:

iPhone 17 pro max would be $1199 to buy (~1273 with tax) or $34.99 for 24 months totaling $839.76. So would cost 433.33 at the end of the lease to keep it

The cheapest 16" MBP would be 2,999 to buy (3186.44 with tax) or $57.99 for 36 months (or 80.99 for 24 months). 2087.64 or 1943.76. So around ~1k to buy it at the end.

It looks like you can keep making payments for 6 months to lower the buyout price a little bit.

So worst case scenario this is a 3 and a half year interest free loan with a higher payment at the end.

Seems not terrible? As long as you treat it as a loan and not a lease you can end at any point it seems fine and nothing really shady about it. You still have the option to own the device for the original cost.

Other than the loss of the iPhone upgrade program and the yearly upgrades, am I missing something here? I guess the biggest thing is you likely can't just pay it off and be done with it if you had the money.

[paxys]

> iPhone 17 pro max would be $1199 to buy (~1273 with tax) or $34.99 for 24 months totaling $839.76. So would cost 433.33 at the end of the lease to keep it

A lot of people aren’t going to have that $433 at the end of the lease to purchase the device outright, and so will have to roll it into another 2-year monthly payment, and another one after that.

So the goal of the program is the same as every other similar one - they want to turn a one-time device purchase into a perpetual monthly revenue stream, while keeping ownership of the asset at the end.

[Aurornis]

> A lot of people aren’t going to have that $433 at the end of the lease to purchase the device outright

I think you're looking at this too much from the perspective of someone who wants to own the phone, not as someone who wants to consider a lease.

Leases are not a new invention. A lot of people, including very financially savvy and well off people, choose to lease rather than buy depending on the circumstances.

It preserves optionality. If you get to the end of the lease period and there’s a new iPhone you want or the battery isn’t holding up, you can choose not to buy it. You don’t have to deal with selling it or trading in.

If someone doesn’t have $400 to buy out the residual then I doubt they would have had the cash to pay for the whole thing up front. I don’t understand what your argument is.

> So the goal of the program is the same as every other similar one - they want to turn a one-time device purchase into a perpetual monthly revenue stream, while keeping ownership of the asset at the end.

It’s an option. They’re not turning anything into anything. Anyone who wants to buy the device can buy it. You now also have the option to lease it for 12 or 24 months and then after that you can still buy it if you want. Or you can not buy it.

It’s options. You don’t have to use it.

[paxys]

> If someone doesn’t have $400 to buy out the residual then I doubt they would have had the cash to pay for the whole thing up front.

That’s the entire point. They would have bought a cheaper phone, or held on to their old one, but are now paying perpetual monthly payments.

There’s a reason car dealerships never ask “how much can you afford”, but “how much do you want to pay every month”.

There’s a reason Klarna is running the program for them.

[br0wnr1c3]

I think this is exactly right — when the options on the table are: - iPhone 17 (~$800) - iPhone 17 Pro Max (~$1200)

a person may reasonably make the choice that they don't need the Pro Max and buy the regular 17.

Now, when the options are: - iPhone 17 ($23/month) - iPhone 17 Pro Max ($35/month)

$12/month extra doesn't seem too bad, except the fact that after 24 months you can't afford to keep the phone and are effectively forced to upgrade to a new iPhone.

I agree that more options are generally better for consumers, but these types of leasing programs are predatory and come at a time when everything is becoming a subscription.

[Spooky23]

What if I don’t want to “own my phone”?

Look, I have one camera with me and one child. As long as the camera gets better every year, I’m gonna want a better camera, every year. I don’t want to deal with carriers and trade-in shopping. Unfortunately this particular deal sucks compared tot he old one.

I’m not financially irresponsible. I value these devices highly and value my time.

[spaqin]

No one's really stopping you from owning nothing and being happy.

[Spooky23]

They did - they turned a 24 month loan/AppleCare that you could re-swizzle with a new phone and exchange the device on the same terms (except the cost delta for the phone) to a shitty leasing arrangement that costs 25% more.

[adamtaylor_13]

> That’s the entire point. They would have bought a cheaper phone

This kinda sounds like, "We should make it hard for people to make poor financial decisions." Which seems like an answer completely orthogonal to the problem at hand.

[pwagland]

What is the problem at hand?

How to get customers to make poor financial decisions? How to sell more phones to people that can't really afford them?

Seriously, what is the problem that is being solved?

[JumpCrisscross]

> They would have bought a cheaper phone, or held on to their old one

Or they would have just bought the new phone and sold their old one for dimes on the dollar on e.g. Gazelle.

[Aurornis]

You know those financially irresponsible people don’t need this program, right? They would have used a credit card to buy it with much worse terms

You seem tilted at Apple for offering a financing option, but your real gripe is apparently with some people who have poor financial decision making skills. Those people could (and probably would) do a lot worse with traditional options like a credit card.

Can we at least compare apples to apples (hah) and look at the actual terms of the program here? Honestly they're not bad, and I say that as someone who leans toward purchasing outright.

[ghaff]

Leasing is just a financial transaction. You need to run the numbers, evaluate the alternatives, and peer at least a bit into the future. I've never leased a car and I doubt I'd lease a phone if only to keep my options open. (At the moment, I'm in the situation where I trashed an older phone on a hiking trip so I'll probably upgrade my iPhone 15 Pro sooner than I otherwise would just so I have a usable backup while traveling again.)

[apparent]

> You know those financially irresponsible people don’t need this program, right? They would have used a credit card to buy it with much worse terms

I thought of this also. The question is whether they will now spend even more on the phone since they won't be paying as much in interest. If so, it's savvy of Apple to suck up that difference instead of letting it go to credit card companies.

Presumably Klarna's share is lower because Apple is rumored to be able to nerf these devices if a series of payments are missed. [1]

1: https://9to5mac.com/2026/07/21/ios-27-code-suggests-apple-co...

[edoceo]

From that lens this is a better option for the "buyer" (renter). Cause revolving credit is >10%, sometimes even more than 15%!

[ChrisMarshallNY]

15%?

Oh, sweet summer child...

https://wallethub.com/answers/cc/highest-credit-card-interes...

[HeWhoLurksLate]

> They would have used a credit card to buy it with much worse terms

average credit card interest rate: 18-25% APR [0][1] average klarna effective interest rate:25-33% APR [2]

getting what are effectively individual lines of credit per-burrito or iphone is crazy work and I wouldn't recommend it most of the time. Save some money up, people!

[0] https://www.experian.com/blogs/ask-experian/research/current... [1] https://www.forbes.com/advisor/credit-cards/average-credit-c... [2] https://wealthvieu.com/debt/credit-card-debt/klarna-review/

[Aurornis]

> average klarna effective interest rate:25-33% APR [2]

> getting what are effectively individual lines of credit per-burrito or iphone is crazy work and I wouldn't recommend it most of the time.

I think this whole sub-thread has gone off track from people who aren't reading the actual terms of the Apple deal.

Nobody's talking about getting a 33% Klarna loan for an iPhone or burrito. You included 2 statistics and 3 citations that have nothing to do with the program we're talking about.

We're trying to talk about the Apple program in the link, not some other financial services complaints that people have about other things.

[nekooooo]

it's a 0% loan with a buyout at the end for 2 years though. not 33% APR.

[madeofpalk]

People are keeping their phones for longer and longer. This makes it as attractive as possible to pay for a new phone at a more frequent rate.

The bet here is that Apple would much rather you spend ~$35/month perpetually than $1200 every 4 years.

This is a 'good deal' if you're already someone who upgrades their phone frequently, but I would imagine this would end up getting a whole bunch of people to pay more money in the long run to Apple.

[Dylan16807]

It's also a good deal if you want to keep the phone for 8 years. Just make sure you take the buy option.

[aucisson_masque]

> It preserves optionality. If you get to the end of the lease period and there’s a new iPhone you want or the battery isn’t holding up, you can choose not to buy it. You don’t have to deal with selling it or trading in.

If you don't buy it at the end of the 24 month, you've been paying for a very costly lease.

2/3 of the price for a 24 month lease whereas iphones are updated for 7, 8 years ? And the resell value is very good.

Especially financially, it would make zéro sense.

[Twisell]

That is the actual point of this program.

Apple clearly pay the fees for the customers loan but at the end, the only real mistake the customer can make and might regret is switching out of the Apple ecosystem.

That's clever and only mildly evil. Financial savvy people will use it as a "no fee loan" if they can't pay upfront. Less savvy will be more receptive to the commercial discourse at the end of the lease. Eco-deniers will think twice before renewing every year.

And it's actually a consolidation of existing options because Apple already offered "no fee loan" here in EU but you had to choose the option to begin with. Now it's look like this is a single contract and you choose the option at the end of the lease.

[Mistletoe]

Why on earth are we leasing phones now???

[throw0101a]

> Why on earth are we leasing phones now???

Same reason some people lease cars:

* want the New Thing regularly

* are happier with OpEx than CapEx (can be handy for business/accounting reasons)

[wolvoleo]

I think people don't really buy phones every year anymore because they can't afford it. But because they're kinda meh year on year. I don't buy apple anymore but my Samsung S23 from 3 years ago has the exact same cameras as the current S26. Same screen, same form factor. Only thing that's new is a slightly faster SoC and a bit more memory for AI features I dont really use anyway. I just don't see the point in upgrading anymore.

[SV_BubbleTime]

Some upgrades are meh, occasionally I want one thing. Like next upgrade I really want a higher optical zoom than 3x.

But I think unlike leasing vehicles, where the vehicle has the same power (approximately and within usable limits) the new phones bring a new battery. If swappable battery was a thing everywhere; that would further depress the sale of new phones.

[0x457]

Well, lets do math:

- from this thread: iPhone 17 pro max would be $1199 to buy (~1273 with tax) or $34.99 for 24 months totaling $839.76. So would cost 433.33 at the end of the lease to keep it

If you upgrade your phone every 1-2 years then what you pay for the phone is something like "full cost - optimistic trade-in value". I see no reason not to do if you know you going to upgrade.

[horsawlarway]

I don't understand this mindset. I get that people who are going to upgrade to the latest flagship phone every 18-24 months will probably do better with this, but realistically... those people are fucking insanely financially irresponsible (and if you can afford it - no shade, I guess, its your money - lord knows I burn lots of cash on hobby projects of my own, although I tend to buy things that are actually projects, and not just glitz...)

But there's just nothing to run on phones built in the last 5+ years that actually puts the hardware through its paces (in the phone form factor, laptops and desktops I'd be lot more forgiving on). The cameras aren't really getting better. The battery capacities seem to be mostly "the same". There's just no practical "reason" to justify the expense at this point (and I'll fully acknowledge this wasn't always the case - there was a period there in the early 2010s where phones were getting better rapidly and upgrading was a big deal).

They're basically buying an expensive piece of jewelry that they'll throw away in 24 months. Like... just buy a cheaper model and get some real jewelry. At least that could be passed down at some point instead of becoming e-waste.

[p1necone]

Yeah I'm on the same page - I spend a couple hundred bucks on a low-end-of-midrange android phone every few years (usually because I broke the old one by doing something stupid like walking into the ocean with it in my pocket). I can't fathom why I would want to spend 5-10x on a flagship to do... what exactly?

My current phone (Motorola g34) runs all the games fine, and that's probably the heaviest thing people use phones for. I do take photos, but like I'm not running a photography business, and social media compresses them to shit anyway so the quality is perfectly fine.

[ZekeSulastin]

So how much annually do you spend on your hobbies, anyways, if you're going to declare getting a new phone every two years "fucking insanely financially irresponsible" :p Glass houses and all that, right?

[beacon294]

LLMs are set to.increase hardware demands a lot. Although I don't necessarily think this is related to the program change.

I know this comment is deep in a thread, but to me it looks like they simply prefer to own the whole apple device payment cycle and not use partners.

BNPL has been a huge bubble outside the traditional credit bubble, this is the same. It doesn't seem like a big divergence excepting that it gives them a contact point and a stick with which to prod customer into a new phone sooner.

[macintux]

For me, the primary value of my phone is the camera, and the telephoto on the iPhone Pro Max models has gotten significantly better in the 2.5 years since mine was released.

Were it not for the camera, I could have stopped upgrading 10 years ago.

My point is, not everyone values the same things you do. The new Siri AI only runs on 15 Pro and higher, I think. New features do arrive in newer phones.

[sneak]

> I get that people who are going to upgrade to the latest flagship phone every 18-24 months will probably do better with this, but realistically... those people are fucking insanely financially irresponsible

This is not remotely true. I buy each and every flagship iPhone every year on or near release day for cash. I have done so every release since the first iPhone came out.

Each September or October my old phone goes into a desk drawer forever, or is wiped and gifted to a partner or close friend. I do not recover any of the costs at the end of the 12 months.

In total, it is way less than $200 per month. That’s not “fucking insanely financially irresponsible” by any stretch of the imagination. $2k per year is a trivial amount of money for the most-often-used computer in my entire life. It pays for itself in the first few weeks of the year.

Separately, I spend another 10-20k per year on computer software and services, because it assists my business in making many times that in revenue. Hell, even my hobby AWS S3 account is like $35/mo and that’s like the same as the lease payment for the flagship iPhone Pro under this program.

Upgrading each year brings real performance benefits, despite your claim that phones don’t materially improve each generation. Whether or not that is worth replacing it before it breaks or not is a separate conversation, but let’s not pretend that upgrading annually is exactly equivalent to lighting $2k on fire. Anyone who participates regularly in US “bar culture”, for example, is spending more each month on drinks than I spend to carry the latest flagship iPhone, and nobody is claiming that eating out three times a month or going to the bar with your buddies every Friday night is “fucking insanely financially irresponsible”. Tech is so cheap now that it’s a trivial amount of money in the grand scheme of things.

(You’ll probably flip when you hear I replace my $7k work laptop every 12-24 months, too.)

Furthermore, I’m not even an extreme outlier. I know people who regularly buy the flagship iPhone for their entire family, in cash, every year. It’s a bit spendy if you’re not using it for business (but who isn’t, in 2026, where every single thing you do is an app) but it’s still simply not that much money in real terms when you consider it’s well under $2k/year/device. Hell, a nice lunch for two people at a decent restaurant even without alcohol is pushing $100 in most cities.

[SV_BubbleTime]

Mine is about three years old now and I want a better camera.

[closetohome]

This math is what lead me to the iUp program in the first place. It's effectively a guaranteed 50% trade-in, which came out to about $200-300 in actual money that I was theoretically sacrificing in exchange for not having to worry about the cosmetic condition of the phone or weirdos on ebay.

And it came with AppleCare+ with Theft and Loss. I stopped using a case. I lived free.

[macintux]

I’ll never stop using a case. Too clumsy, too careless. 2-3 days without my phone would be manageable but why?

[GolfPopper]

I'm a little confused on why anyone would pay this much for a phone. (Although if you consider it conspicuous consumption that happens to work as a phone, I can believe that.)

[blackqueeriroh]

I’m certain there are things you pay for that I would look at and go “I’m a little confused on why anyone would pay this much for x. (Although if you consider it conspicuous consumption that happens to work as x, I can believe that.)”

But I wouldn’t, because I actually understand that people are different and like it that way.

Consider: your opinion is worthless when it comes to what I care about in terms of luxuries I enjoy, just as mine is worthless when it comes to what you care about in terms of luxuries you enjoy.

It’s way better when you don’t run around judging other people for liking different things than you.

[sneak]

I’ve always been told when computer shopping to “buy the fastest cpu and the most ram you can afford”. This goes doubly for revenue-generating devices.

My iPhone is the computer I use most every day, by a WIDE margin.

[ghaff]

>"buy the fastest cpu and the most ram you can afford”.

I would append "subject to diminishing returns" for your use cases.

I could afford maxed-out computers (within reason) but, for most purposes, the premiums for the very top-of-line exceeds any discernible increase in functionality I would experience.

[al_borland]

I’m not sure this is the best advice anymore. So many people’s needs don’t demand much of a computer.

My last personal computer purchase was an M1 Pro MBP 4 years ago. I could have maxed it out and my life would be the same, but instead I bought on the low end… or somewhere in the middle if we look at Apple’s lineup as a whole.

It’s now 4 years later. This is the longest I’ve probably ever kept a laptop. It’s still running fine, I’m not hurting for more power, and will like wait another 1-3 years before an upgrade… maybe more, we’ll see.

The laptop is a glorified Chromebook for me. I do edit some photos from time to time, encode some video, and code a bit. But 95% of the time, I’m just looking at webpages. Maxing the thing out would have been a massive waste of money.

My work laptop is also a MBP of a similar generation. It’s not up to me when it’s upgraded, but it also wasn’t maxed out, and it’s still fine. VS Code and Outlook aren’t going to run fast enough to matter with a M5 Mac and 128GB or RAM. The bottleneck isn’t my laptop, it’s bureaucracy.

For some, having top end specs will matter, but that is a shrinking percentage of the overall market.

[lovich]

That’s tame when people are leasing literal meals with klarna

[Barbing]

Also leasing whatever Subway sells https://sezzle.com/shop/subway

[slater]

money number must go up?

[paganel]

> Leases are not a new invention.

The Davos ghouls are proven right each and every day:

> You'll own nothing. And you'll be happy

Back to indentured servitude we go, where by "we" I mean us, the poors, not the wealthy, nor their relatively still well-off direct servants (like many of the users here working for Big Tech).

[tw600040]

Someone who won't have that $433 has no business even thinking about a 1200$ phone in the first place

[dzonga]

you overestimate the financial health of most Americans.

most people live on credit cards as bridge finance between paychecks. when I mean most people - I mean 50% of the population.

[Aurornis]

The median US household has a net worth of $200,000. Even a 50th percentile US household is very wealthy by global standards.

Credit card statistics are heavily manipulated because it's easy to make them sound terrible. I don't know which factoid specifically you're referring to, but the studies about "X percent of Americans couldn't handle an emergency expense without putting it on a credit card" often use tricks like including anyone who would pay by credit card if they could. I remember reading some of these studies and realizing that I would have been included in the statistic because I prefer to use a credit card where I can, even though I pay it off before interest accrues.

[cronin101]

Net worth or net income? Being 40yo with only 200k of worth between two when you’re halfway through your working life and have had 10y of appreciation of assets isn’t very much to go forward with.

[kube-system]

> The median US household has a net worth of $200,000.

Which is primarily the market value of the home they live in. They can’t pay a bill with it.

The median American household has $8000 of liquid cash in all of their cash accounts combined.

[jandrewrogers]

> The median American household has $8000 of liquid cash in all of their cash accounts combined.

That’s a lot of liquid cash. It reinforces the idea that the median American household has an unparalleled amount of money to burn on whatever.

[underlipton]

>Even a 50th percentile US household is very wealthy by global standards.

Not by purchasing power. We're also in a weird position compared to our "peers" in that most of them have relatively easy access to much less wealthy neighbors via over-land transit or a cheap plane ride, whereas we have to travel quite a distance or pay for extremely expensive plane tickets. Which means that we're stuck here with what a USD buys in the US, instead of being able to hop over to someplace else where a dollar goes further. We also work more than our peers, so our per-hour earnings take a hit compared to theirs.

I could go on. The trick is trying to gaslight Americans into second-guessing the economic pain they've increasingly felt over the past few decades. The 50th percentile American household lives worse than the 50th percentile household of quite a few less-wealthy countries.

[dzonga]

averages strike again.

Median wealth in the U.S just around $100k - see Wikipedia & other databases.

how many people own houses ? & for those people that own houses - average equity in those houses is less than 45%.

ain't no factoid - but lived reality of most people. maybe on the coasts where techies and finance bros live - but the rest of america is facing a bleak financial reality.

[Aurornis]

> averages strike again.

My comment said "median" explicitly

The number was for household wealth. I think you're looking at individual wealth, which would naturally be lower because it's spread across more people.

Source: https://www.federalreserve.gov/econres/scf/dataviz/scf/table...

The average (mean) is closer to $1 million per family, but that's not a useful number.

[dzonga]

actually per UBS [0]: Median Wealth in the US is $68K. Almost neck in neck with median income.

[0]: https://www.ubs.com/global/en/media/display-page-ndp/en-2026...

[prmoustache]

I think what he means is that if you can't swallow $433 on one payment, it is more likely you can't support and accumulate monthly subscriptions either and you should look at sub $200 smartphones.

It is not like having a $1200 flagship smartphone is a requirement to earn a living like, say, having a mean of transportation is to many people not living close to their workplace. There is nothing one do in a flagship that you can't do - albeit maybe with less quality or slower - than a lower end one. All allows to make and receive calls, use messaging, have a browser, apps.

To be honest, I am clumsy and break stuff easily so I have never spent more than $200 on a smartphone, my current one is a pixel 6a running grapheneos that I bought for 180€ 2.5 years ago. It makes very good photos actually and is fast enough for everything I do. I understand people can want something nicer but it is not a need.

[gruez]

>when I mean most people - I mean 50% of the population.

That's not really applicable because:

1. the study is for an "unexpected" expense. This you can see from 2 years away

2. The wording in the study was something along the lines of "would have to dip into savings", not that they literally don't have any money for it. The fed's survey of consumer finances shows the median household has between 7-13k (depending whether you're counting median income or median wealth) in their checking accounts

https://www.federalreserve.gov/econres/scf/dataviz/scf/chart...

[paxys]

Not sure what you are trying to argue.

Should people be more financially responsible? Yes

Are they today? No

In a rational world payday loans, predatory auto loans, BNPL, perpetually rolling credit card debt etc would not need to exist. Yet these sectors are rapidly growing and companies in it are thriving.

[gruez]

>Not sure what you are trying to argue.

I'm saying the specific claim of "most people live on credit cards as bridge finance between paychecks. when I mean most people - I mean 50% of the population" is false.

[Zambyte]

There are phones that cost a lot less though. 50% of Americans being unable to afford iPhones doesn't mean they should just lease them. People need to stop associating so much personal sense of worth with their handheld computer.

- written on my S10

[Danox]

For many that is their only computer in that context having a smartphone definitely isn’t a bad thing. What’s bad is not saving up to buy it. Do not buy it on credit if you don’t have to, however, it must be said that if you get an iPhone, it does have better resale value (all Apple computers, and iPads) have a longer lifespan software wise, probably more than most other smartphones, which comes back to the question why are you renting or leasing? Just buy it on time with minimum interest upfront if you absolutely must buy it? Owner of an 11 Pro iPhone from 2019. With one or two years of Apple software support left?

[blackqueeriroh]

> People need to stop associating so much personal sense of worth with their handheld computer.

This might be the funniest thing I’ve ever read on this nerd website.

[harvey9]

A lot of people buy phones as conventional status symbols rather than for nerd points. My massive generalisation is hn values doing something interesting with the hardware.

[oniony]

Crazy you had such a pertinent message written on your S10.

[Danox]

And those people never get to a point where they save anything, renting, leasing, pay as you go, credit cards, reverse mortgages are a losing game the house always wins.

[paxys]

Have you met…America?

[PunchyHamster]

wait till you see what people do with car payments

[Zambyte]

Selling my car that I fully owned in favor of a nice bicycle and an e-scooter was one of my best financial decisions in the last few years.

I don't have to deal with insurance, parking (if parking is free by you, it shouldn't be), maintenance (I work on them myself, I just pay for cheap parts), and fuel is effectively free. That's all on top of the car payment for people who haven't paid off their car.

[frmersdog]

Genuinely wish I had done so when I lost my job at the beginning of the pandemic. I've dumped so much money into a vehicle that's falling apart, which I've driven probably less than 25k miles since. If you can't justify car ownership with your income, they're a money pit.

[harvey9]

My car is fully owned and justified by my commute taking 3x longer by bus. Time saved is as important a measure as miles driven.

[esikich]

You do understand that unless you live in a relatively warm metropolis this is literally not an option right?

[sakjur]

There are real infrastructural reasons it's harder to do in North America compared to Europe, but that's not it.

Biking is relatively popular and definitely feasible within ten km or so from most city or town cores here in Scandinavia, not just the metropolises.

[Scoring6931]

You need to travel more. Plenty of people in Canadian cities rely on public transport just fine.

[olyjohn]

The Netherlands would like to have a talk with you.

[tshaddox]

Isn't the 0% APR financing essentially just a sales expense? Even if people generally don't immediately roll into another 2-year agreement, the main reason zero-interest financing works for the sellers is simply that it makes it easier for people to spend money on expensive high-margin stuff.

Multi-year zero-interest loans are also commonplace in high-price, high-margin specialty retail: think La-Z-Boy, Sleep Number, home improvement, hot tubs, home gym equipment, etc.

[maxerickson]

Probably the better way to look at it is that the finance charges are built into the price.

[paxys]

They also charge heavy interest and fees to people who miss payments, but in this case that will be captured by Klarna.

[blackqueeriroh]

Klarna does not charge interest or fees to people who miss payments.

[paxys]

https://www.klarna.com/us/help/payments/what-happens-if-i-ca...

> Late fees: what to expect > Late fees may apply if your payment isn't collected after multiple attempts:

> Pay in 4: A late fee may be charged per missed payment.

> Pay in 30 Days: Be sure to pay on time to avoid late fees.

> Pay over time: Late fees and interest may apply as outlined in your credit agreement.

Unlike what a lot of people in this country think, Klarna is not free money.

[tshaddox]

Yes, and for most of those retailers I mentioned the financing is handled by e.g. Synchrony Bank.

[apparent]

> So the goal of the program is the same as every other similar one - they want to turn a one-time device purchase into a perpetual monthly revenue stream, while keeping ownership of the asset at the end.

Yep, which reduces the need to make new devices notably better than old ones, since you'll always have a steady stream of customers coming off their leases.

[blackqueeriroh]

Are you seriously arguing that Apple is doing this so they don’t have to keep making devices any better? I just want to be very clear about this.

[apparent]

That gets it backwards. They're not doing this because they want to make devices that are less compelling purchases, but they are aware that their coming pipeline will in general not as be compelling to potential upgraders as in the past. This is largely because the category has matured, and people don't feel the need to upgrade nearly as often as 5-10 years ago.

By getting people to be default-subscribers rather than purchasers who may decide to upgrade, they improve their odds of keeping a larger chunk of their hardware revenue stream.

[bijowo1676]

its not that they wont have $433, it is that people will be unwilling to shell out $433 for two year old device, if they have an option to renew it for a shiny new model and roll forward into another BNPL loan

[gruez]

I checked the price for a used iPhone 15 pro (ie. 2 year old iPhone) on ebay and it's around $400-$500. Therefore the implied depreciation of the lease is pretty fair, unlike the lowball offers you typically get for trading in a phone.

[s0rce]

I just bought a 1 year old iPhone 16 on Facebook marketplace for $400. You can find pretty good prices if you don't need the latest device.

[olyjohn]

I'm not sure why this was downvoted. Plenty of iPhone 16s on swappa for around this price.

[DarmokJalad1701]

> roll forward into another BNPL loan

It is not rolled forward. If they don't want to pay the $433, then they don't. They return the device and the new device's lease doesn't include that $433.

It's not like a used car loan that some people have that keeps growing with each transaction (and at insane interest rates).

[ksec]

>they want to turn a one-time device purchase into a perpetual monthly revenue stream,

Precisely what they should have done for service revenue instead of milking App Store for the past 10 years. They should also have bundled Apple Care as part of it.

It would also allow them to hike up their price for iPhone. For example I wouldn't be surprised if the upcoming iPhone Fold and next year's iPhone 20 / XX start at $1499 to $1999.

My question is how will this roll out world wide, is this going to be like Apple Credit Card, Apple Cash and other things that is US only? Who is actually paying for the interest free loan. Somewhere along the line someone has got to give.

This is all good direction that is happening in the past 12 months, MacBook Neo, Apple Upgrade. Hopefully they will also fix the software part. macOS doesn't need annual upgrade. Perhaps neither do iOS. And the last thing would be about the App Store. But I guess that will take a lot longer.

[lesuorac]

> while keeping ownership of the asset at the end.

But they're not actually interest in owning 2 year old phones though right?

They're just interest in you / 2ndary market not owning any?

[paxys]

A refurbished iPhone 15 Pro is selling for $929 on their website right now. Trade in price for that exact model is $410. So yes they are very interested in that old phone.

[Aurornis]

I take it you’ve never purchased an Apple refurbished product? They’re in excellent condition. They do not look like 2-year used and abused trade ins. If trade-ins are going back to the refurb inventory (which I don’t know if they do) then it’s only after extensive actual refurbishment and new parts.

They’re not putting it back into a box, listing it for sale, and pocketing the difference.

[fckgw]

They have the ability to tear the whole thing down to guts and screws. They absolutely do replace the case, glass and battery and sell as refurbished. They already do complete case swaps on their Macs.

[ezfe]

The ones that are not in great condition get sent to third parties and sold for slightly less. But Apple will replace the screen or battery and sell them themselves as well. I've gotten Apple refurb products with minimal signs of wear.

[ToucanLoucan]

It's still obviously making them money. How much, who's to say, likely highly variable depending on the condition of the phone. But if it didn't make them money they wouldn't do it, they're not a charity.

I'd imagine even a phone they can't fix to sell still has some value, even as scrap to them especially as the costs of every damn material that goes into any electronic device continue to soar.

And that all being said: two things can be simultaneously true at once. Leasing is a perfectly valid form of... well you can't really say ownership, acquiring goods I guess? And it also does mean Apple can now turn what may have been one-shot purchases into people who are just fine paying a monthly payment ad infinitum. And that, in turn, opens the door for keeping people on a perpetual new-phone treadmill of monthly payments that involve them never actually owning anything.

You can very easily tie this into the Samuel Vimes Boots Theory of Economics:

The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that’d still be keeping his feet dry in ten years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

[Aurornis]

> It's still obviously making them money.

They’re obviously making money on the whole purchase and program because they’re a business, not a charity.

The assumption that they’re making significantly more money on this than direct sales may or may not hold. It could be that they’re targeting a similar level of end-to-end profit as direct sales but using this to expand their market by providing more purchasing options.

Some people get angry at the prospect of a company making money, but they’re not charities. Everyone should do the math and decide which purchase options work for them. What works for you may not be appropriate to force on to the rest of the population.

[smallmancontrov]

Since the days of Samuel Vimes, durable goods have undergone spectacular deflation and health care, housing, and education have undergone spectacular inflation.

One month of median US rent buys three 55" TVs.

The math has changed.

[paxys]

The internals in that phone are probably worth more today used than brand new 2 years ago.

[trollbridge]

Given how rapidly iPhones depreciate, being able to just give it back after 2 years is pretty reasonable. My 16 Pro Max is worth maybe $500 on the resale market.

[notyourwork]

Have to milk the economic tit for all it’s worth.

[ezfe]

It doesn't get "rolled in," since you don't have to transfer any liability to the next lease.

[quickthrowman]

> A lot of people aren’t going to have that $433 at the end of the lease to purchase the device outright

If someone can’t plan ahead 2 years for a $433 expense, they definitely should not have a top of the line iPhone. When my income was low I had an iPhone SE that cost $329.

[thisislife2]

If everyone was as rational as you, Americans wouldn't be living in debt that most cannot afford. Most Indians have a healthy fear of debt, and that is why the iPhone doesn't have a larger share of the mobile phone market here as it really is unaffordable to most Indians (as it is for many in America). Americans however have accepted debt as a normal part of their lifestyle. When a rich man says poor people shouldn't be ordering food through Door Dash, it sounds very cynical but there is a basis of truth in it that some poor people really do not know how to manage their finances.

[blackqueeriroh]

This is not why Americans are in debt. If you really think this you understand so little.

That rich man was born into wealth, so he has no concept of the lives of poor people.

[Danox]

Most people don’t take a personal finance class and they also don’t plan ahead short term thinking is the norm and that percentage is over 50% of the population.

[paxys]

Well there’s a reason Americans have $1.25 trillion in credit card debt.

[maratc]

Now let's count their mortgage debt.

[jay_kyburz]

I would have thought this was about Tax. I'm sure its different in every country, but I believe a lease is very different to purchasing hardware.

[giancarlostoro]

Let's suppose that Apple somehow doesn't release any new iPhones during this leasing window, what happens then? Does Apple ship you back a new phone that's essentially the same model? I know this is unlikely, but I am curious.

The other thing to consider, that while Apple might sell you the phone for $400 or whatever, they might re-sell it as refurbished for $700.

[enahs-sf]

It feels like there’s a psychological component here for you to feel obliged to upgrade at the end of the 2 or 3 year term. Who wants to pay $1k for a 3 year old MacBook? Trading in/up will feel natural. It does feel less and less like you own the hardware though.

[Grombobulous]

This is exactly what’s going on here.

You literally don’t own the hardware, it’s a lease.

That said, you can purchase with financing with an Apple Card, or with numerous other financing options like carrier financing. However, leasing allows the purchase prices of phones to continue climbing while still presenting a palatable monthly payment.

I think what’s going to happen with this is a lot of people will be lured in with low payments and then be surprised with the ending “keep your phone” payment, where it will feel like it makes more sense to just get the new phone and continue the same payments.

Paying a $400 payment on a 2 year iPhone will look insane as that’s the depreciated value of a 2 year old phone.

[gruez]

>Paying a $400 payment on a 2 year iPhone will look insane as that’s the depreciated value of a 2 year old phone.

Check ebay. That's around the price of a pro series iPhone 2 years old.

[Grombobulous]

That's exactly what I mean.

If you're the person who has leased this phone, you make all your payments and get to the end and your bill to keep the phone forever is going to seem kind of high.

Obviously, that's logical. In your lease, you have only paid the price of depreciation.

Just like with cars leasing is the most expensive way to own them, but I guess there's a certain buyer who doesn't want old stuff.

[blackqueeriroh]

You all really do not understand. Many people will gladly pay the $433 at the end because they’ve been able to get a new job and make more money in the interim.

[Grombobulous]

I think that a big chunk of those lessees will be deciding between coming up with $433 in cash or give the phone back and continue with the same payment and they’ll choose the latter.

But then again maybe the person doing the lease knows this already and just wants a new phone frequently.

My worry is that a lot of people will see a lower payment and not realize that they’re getting the phone at the end of the term.

[jedberg]

Except in this case you're not paying any extra. In fact it's cheaper to lease and then own an iPhone with this program because of the time value of money.

It's an interest free loan for 2/3 of the price.

[Grombobulous]

It’s not cheaper compared to the alternative of keeping the phone beyond the lease period.

[thisislife2]

Or, they can still pay the $400 and try to resell it for higher. And then buy a cheaper Android when they finally realise being in debt for making a fashion statement is stupid.

[Grombobulous]

I don't think this is about Android versus Apple, there are definitely Android phones sold on credit and there are definitely high-end expensive Android phones out there (Samsung Galaxy Z Fold8 Ultra).

[nerdjon]

That I could see, I guess the question comes down to how often to people upgrade. That comes down to discipline.

Is a 3 year upgrade cycle for a MacBook Pro unreasonable? Would you get a lower spec machine since you were not trying to maximize the life of the machine? I know I always tend to overspec my machine to keep it for as long as possible.

My M3 MBP with 36GB of ram (looks like it was about 2500 3 years ago) would get me $945 in trade in credit. May be able to get more on eBay but I can't argue with just doing trade in is easier. A bit less than I would "save" by just upgrading at the end of the lease and this already is not the base model so the number does shift.

Especially when I look at the payment options right now I could finance that MBP about $250 on my Apple Card for 12 months no interest, or $57.99 for 36 months. and then I get a new one.

Would probably depend on what it is I was doing with the machine, am I doing tasks that would actually benefit from better and better machines like video editing and similar tasks or am I just using my computer fairly basic in a way that even an M1 machine still handles just fine.

[dgellow]

> Is a 3 year upgrade cycle for a MacBook Pro unreasonable?

For a personal machine? Yes that’s something I see as unreasonable, MacBook Pros have a very long lifespan. M1 laptop are still pretty awesome machines. For a business an upgrade every 3 years could make sense

[chorizo]

I still use a 16GB MacBook Air for all my development and simulation work (4P+4E+8GPU cores). Even wrote my own Metal gpu code to offload part of the simulation workflow. Modded the MacBook Air with thermal pads and a homemade cooling pad made from cardboard and a usb fan to limit throttling. I’ve run simulations for over 24 hours and kept temps below 90C successfully. A newer Mac mini would be better, but those are so expensive now.

[jonhohle]

I have an M1 Pro with 32GB of RAM and am hoping to make it through the rampocalypse. This may be my longest upgrade cycle, but fortunately the machine is fast enough for most things including LLMs.

[nerdjon]

I mean we are talking about the "Pro" machine. I think there is likely an argument to be made that if you are not doing a task that would genuinely improve with more powerful hardware do you actually need the Pro machine and you could instead go with a MacBook Air that you keep for far longer since your doing basic tasks. I do think there is still some ideas of the pro vs the Air that we are still stuck with from the Intel days.

Is that threshold for using a Pro machine 3 years, I don't know probably not for most people. My M3 Pro from almost 3 years ago is still running beautifully. I could make the argument that more power would benefit what I do with this machine without a doubt, is it worth the upgrade? I don't know, but I would be lying if I have not been thinking about it.

But I also think about the mentality I had when I bought this machine, and the mentality I had when I was looking at possible upgrades just a few weeks ago. Possibly paying more to overspec the machine compared to my current use case assuming that I want to continue to use it in 3 to 4 years.

I don't know if that calculation is necessary as cut as dry.

[thewebguyd]

> do you actually need the Pro machine and you could instead go with a MacBook Air that you keep for far longer since your doing basic tasks

This is probably the case for a lot of people, but Apple is smart with their lineup and there are several what I'd call "not pro" features that are gated by the MBP (and iPad pro) which is unfortunate.

Primarily, 120hz screen, SD card reader, HDMI port. None of those are really "pro" featuers, they're just basics I'd expect on any premium laptop.

That being said, 3 years is a tad on the aggressive side for an upgrade cycle for a laptop. I just upgraded my M1 last year, and this M4 Pro will easily last a year or two longer before I feel a compelling need to upgrade, outside of getting RAM constrained. Use case is photo+video production. So for me, a 5 year cycle would be about right.

But also depends on how you spec it out. If you are just buying the base model, then 3 years makes sense. If you spend extra to max it out, you'll be able to hold onto it for 6+ years.

[Danox]

A top-of-the-line M series MacBook Pro, or a Mac Studio Ultra will command more than a $1000.

[halJordan]

Is that terrible though? You're saving $1000 on a 2/3 year cadence. I'm not a fan of the one size must fit all mentality, and that the one size is the conception that we must all run every piece of he into the ground before replacing it.

[SkiFire13]

You're saving $1000 if you were normally throwing away your 2/3 year old phone instead of selling it to someone else.

[giancarlostoro]

> my guess is that they are hoping that most people just will send in the device and upgrade.

That's precisely why they set it up this way, honestly leasing always made more sense for businesses. I prefer to keep my phones, peace of mind knowing, if I lose something that somehow did not make it to the backups, I can just turn on my old phone and find it.

[wombat-man]

Yeah I switch between android and iPhone sometimes so there's always something I forget to transfer over. After a long enough time I can wipe it and have it as a backup phone.

[gofreddygo]

I see this as psychology driven, not math. It pushes people to look at new options and tempt an upgrade at the end of the lease (pay $1000 for a 3 year old mac or just upgrade ?).

This also pushes term completion with early termination charges (discourage selling before term ends).

And they know money will be tight for their consumers, they can't lower prices anytime soon so give out 0% loans.

Following their tradition of screwing the frugal, cheapest options seem to be excluded.

Its a subscription model for Apple hardware.

[Spooky23]

It’s all about the AppleCare. I’ve used the upgrade program from the beginning. The issue with it from Apple is if I have an iPhone, iPad, MacBook I’m not gonna buy the $20/mo AppleCare.

They are also dumping a weird risk premium on the end user. I literally get a new phone every year with the upgrade program, there’s no way I’ll be doing that going forward, at least through the lease. I’ll just buy it with cash and wait for a deal.

[musictubes]

AppleCare is even more important with the lease. If you lose the phone you have to pay Klarna to replace it. There might also be lease cancellation fees on top of that.

That is my big problem with leasing portable things. I never get AppleCare because I can self insure. But if I lose the phone 8 months into the lease I am deep in a hole.

[Spooky23]

They want their $19.99 so you cover your other stuff.

[Danox]

Over the years, I’ve never bought AppleCare why? Intel iMac 27 inch computer lasted 9 1/2 years. Everything else iPad, iPhone 7 years and more easy…

[futhey]

So the buyout price is never going to match depreciation, and in almost all cases keeping the device doesn't make sense.

The flip side of this, Apple gets more control of the resale market, pushing more buyers into the new device market.

In theory it lets them solve any market problems that emerge where independent resale markets let high quality devices cannibalize sales of new devices.

[qurren]

I also wonder whether this leasing thing is also a covert way to get people to be subject to more tracking. If you own a device you have a legal right to do anything to it you want, including jailbreak it or install your own OS that executes things differently. If you lease it you don't necessarily have that right since you are only leasing the rights to use it, not modify it.

[Danox]

Leasing/renting/warranties is a way of making continuous money from an individual or a company the process is the same.

Far beyond the actual/original cost of the item which is why it’s not a good deal for an individual.

Once again, taking advantage of short term thinking.

[anonymousiam]

Aside from the financial analysis, there is also the fact that this strategy from Apple will prevent customer churn to alternative phones.

[fishingisfun]

that doesnt happen lol

[illwrks]

This is crazy, this is just PCP finance… for a phone!

[MrGilbert]

If I were good at financial math (which I'm not), I would calculate that against a regular loan. E.g., how high would the interest be, if you were to keep the device.

[Danox]

Considering the lifespan of an Apple device, and resale value you are better off just buying it is cheaper in the long run.

[gruez]

its interest free

[fckgw]

They still have a 12mo lease term if you want to upgrade yearly.

[dgellow]

Wait, do people actually upgrade yearly? I always thought it was hyperbolic

[zwily]

Every year since the first iPhone came out. It's sort of superstition at this point. Not sure what would happen if I broke the streak.

[layer8]

Around 20% apparently do: https://c9ac71a8282e1fecd95e-f07dbcddcacf0d4c572ea7178ee6902...

From: https://www.sellcell.com/blog/how-often-do-people-upgrade-th...

[fckgw]

It's not common (I think average upgrade cycle on iPhone is a little more than 3 1/2 years now, and getting longer every cycle) but it's not unheard of. The iPhone hold value well enough that you can often trade it in at something like a $200 discount and just get the new one.

Considering the cost of a battery replacement, it's not the worst value proposition in the world.

[dbbk]

I do for my iPhone yes. It's definitely overkill and certainly not recommended for 99% of people.

[Danox]

Crazy the ultimate in short term thinking…

[gigatexal]

This is predatory. I don’t like it. They should just split the cost equally over the number of months so at the end you have paid it off.

[engineer_22]

Are there any “gotchas” of leasing vs owning the device? Do your rights to the data change? Does your responsibility to maintain the fit and function of the device change? How does lease vs buy benefit the consumer?

[dyauspitr]

It’s a forcing function for an upgrade. You pay 75% of the cost of the device for each 2 year cycle and many people will keep doing that in perpetuity. Compared to someone that keeps their phone for 6-7 years, the leasee will pay 3x as much over that 6 year period. Apple will also get the phone back and resell the refurbished one for 50% of its original price.

Apple will benefit in two ways. They will make 125% of what they used to make on every phone they sold because they can sell it twice and more people will be forced into the two year upgrade cycle (because they can’t afford the buyout at the end) increasing their overall sales numbers in general. If you’re a consumer, you should just treat this as a 24 month interest free loan and then buy the phone outright at the end of that period. If you put the outright cost of the phone into a bond (say 7.5%) during that period, you will even get 3 months payment free and only pay for 21 out of those 24 months.

[Danox]

Absolutely, you pay more people need to take a finance class, or buy shares in Apple, do one or the other or both. Please…

[apercu]

"You'll own nothing and you will love it"