Klarna became the leasing provider for Apple Upgrade, a program letting customers lease iPhones. According to @klarna The partnership shifts Klarna's buy-now-pay-later model into hardware subscriptions.
Key facts
- Klarna is Apple Upgrade's leasing provider
- Apple Upgrade leases iPhones at $35–$60/month
- Klarna's BNPL APR ranges 0%–19.99%
- Klarna processed $100B in 2025 volume
- Klarna's IPO valued at $15–$20B
Klarna is now the leasing provider for Apple Upgrade, a new way to lease iPhones, the company announced on X. According to @klarna The arrangement turns Klarna's buy-now-pay-later engine into a recurring hardware subscription, competing with carrier installment plans and Apple's own iPhone Upgrade Program.
Apple Upgrade lets customers lease a new iPhone each year with monthly payments, typically around $35–$60 per month depending on the model. Klarna's BNPL model typically charges 0% APR on short-term installments but can reach 19.99% APR on longer plans, per its public terms. The partnership gives Klarna access to Apple's premium customer base and a recurring revenue stream, moving beyond one-off retail purchases.
Klarna, which processed $100 billion in transaction volume in 2025, has been diversifying into travel, ticketing, and now hardware leasing. The Apple deal follows its 2025 expansion into subscription-based lending for services like Spotify and Netflix. [Reuters reports] Klarna's IPO, filed confidentially in 2025, could value the company at $15–$20 billion. The Apple partnership may boost recurring revenue metrics ahead of the listing.
Why This Matters More Than a Press Release
The deal is structurally different from Klarna's core BNPL business. Leasing involves residual value risk—Apple must estimate the iPhone's trade-in value after 12 months, a computation Klarna's credit models don't typically handle. Klarna did not disclose the financial terms, residual value guarantees, or revenue-sharing structure. The partnership also pits Klarna against carrier installment plans from Verizon, AT&T, and T-Mobile, which offer 0% APR on 24–36 month terms. Klarna's shorter lease cycle (12 months) may appeal to upgrade-hungry users but could carry higher implicit interest.
Watch for Klarna's S-1 filing in Q3 2026, which will disclose the revenue contribution from this partnership and whether Apple's residual value risk is indemnified. Also track Klarna's default rates on hardware leases versus traditional BNPL—a key metric for IPO investors.
Key Takeaways
- Klarna becomes Apple Upgrade lease provider, turning BNPL into hardware subscriptions.
- Partnership expands Klarna's recurring revenue ahead of IPO.
What to watch
Watch for Klarna's S-1 filing in Q3 2026, which will disclose the revenue contribution from this partnership and whether Apple's residual value risk is indemnified. Also track Klarna's default rates on hardware leases versus traditional BNPL.
