Can't Afford the iPhone? Apple Launches 'Under $600' Rental Plan to Encourage Faster Upgrades

Apple has announced it will launch a new program in the U.S. market, enabling consumers to rent the latest generation iPhone for as low as $17.99 per month (approximately NT$583) over a two-year period, significantly lowering the upfront cost of ownership.

According to CNBC, the new plan, named 'Apple Upgrade,' is a collaboration with 'Buy Now, Pay Later' (BNPL) service provider Klarna and will be available both in Apple's physical retail stores and online. Consumers can select either a one-year or two-year iPhone leasing plan after passing a simple credit check. Additionally, popular Apple products such as the Apple Watch, Mac, and iPad also offer similar leasing options with terms of two to three years.

The introduction of this leasing program comes amid Apple's recent decision to raise the entry-level prices of multiple products—including iPads and Macs—by at least $100 (approximately NT$3,240), driven by a global surge in memory prices. In some cases, high-end models have seen price increases exceeding $1,000 (approximately NT$32,400).

John Ternus, who will take over as Apple's CEO in September. (AP)

Bob O'Donnell, Senior Research Director at market research firm IDC, pointed out that the majority of Apple consumers typically purchase products through installment plans or trade-ins. The new leasing model allows Apple to shift market focus from high prices and price hikes to low monthly payments. Bernstein estimates that the current average iPhone upgrade cycle has stretched to nearly four years, and leasing services could help accelerate consumer upgrades.

Once the 24-month lease period ends, users must either return the device, pay a final lump sum to own it, or directly upgrade to the next-generation model.

The latest iPhone 17 smartphone on display at an Apple Store. (AP)

Of course, higher-end devices come with higher monthly rental fees. The unlocked iPhone 17 Pro has a monthly lease fee of $31.99 (approximately NT$1,036) for a two-year term and $45.99 (approximately NT$1,490) for a one-year term.

Due to a global shortage of memory chips, market analysts widely expect rising component costs to push up the pricing of the next-generation iPhone and related products. Morgan Stanley estimates that the base price of the iPhone 18 Pro could increase by $200 (approximately NT$6,480) to maintain Apple's targeted gross margin. Meanwhile, TechInsights' latest teardown report shows that component costs have increased by at least $300 (approximately NT$9,270). Furthermore, Apple's first foldable phone, expected to launch alongside the iPhone 18 Pro in September, is projected to carry a price tag as high as $2,500 (approximately NT$81,000).