Apple now offers a subscription-style option in the U.S. called Apple Upgrade, letting customers pay for an iPhone in monthly installments instead of a lump-sum purchase. Example: the iPhone 17 Pro 256 GB retails for $1,099 in-store or can be “rented” for $45.99/month over 12 months, totaling $551.88 by the end of the term. The choice matters: at the end of the period the customer must either return the device, trade it in for a new model, or buy it by paying the remaining balance.
How Apple Upgrade works
With the 12‑month option, subscribers pay $45.99 per month (totaling $551.88) and then choose one of three outcomes provided by the program: return the iPhone with no further obligation, return it and replace it with a newer model, or purchase the device by paying the retail price minus the installments already paid. The end‑of‑term buyout is handled through the program’s financing partner, Klarna.
Returning the iPhone: the real cost to the user
If you return the iPhone at the end of 12 months, your effective cost for having used the phone for a year is the $551.88 you paid (sales tax excluded). The downside is that you no longer own the device and cannot resell it. By contrast, buying the phone outright for $1,099 and selling it privately after a year can be cheaper depending on the resale price. For example:
– Resale at $650 → net cost $449 after one year (cheaper than the subscription);
– Resale at $500 → net cost $599 after one year (more expensive than the subscription).
The program therefore appears to assume an average depreciation greater than 50% in one year to remain advantageous: on a $1,099 device, Apple effectively recoups $547.12 implicitly ($1,099 − $551.88). For comparison, Apple currently offers $560 for an iPhone 16 Pro in good condition — a model released nearly two years ago — underscoring how variable trade‑in values are and how that variability supports the program’s margin.
Trading up to a newer model: the spiral of monthly payments
If you return an iPhone 17 Pro to upgrade to the next model and the new model carries the same hypothetical monthly payment, you simply restart the cycle. At $45.99/month for two consecutive years you will have paid $1,103.76 in total. In theory, buying two models outright and reselling them privately after use can often be cheaper than committing to two consecutive 12‑month subscriptions, depending on resale values. The trade‑off with Apple Upgrade is convenience and predictable monthly outlay in exchange for not owning the device and potentially paying near‑retail over time if you continuously upgrade.
