The smartphone industry’s next battleground may not be the phone itself, but how consumers get it. As premium devices become more expensive, Apple, Samsung, and others are betting that leasing, subscriptions, and guaranteed buyback programs can make upgrading more attractive.

This week, Apple launched Apple Upgrade in the U.S. in partnership with Klarna, allowing consumers to lease an iPhone, Mac, iPad, or Apple Watch for a monthly fee with the option to upgrade, return, or eventually purchase the device. Samsung, meanwhile, has been offering its Galaxy Forever program in India, combining financing with a guaranteed buyback to let consumers upgrade flagship Galaxy smartphones more predictably.

On its earnings call on Thursday, Apple CEO Tim Cook said the Upgrade program is intended to make it easier for customers — particularly those who prefer upgrading on a regular schedule — to access the company’s latest products through a leasing plan. He also said Apple’s relatively high resale values make the model well suited to such plans.

The shift comes as consumers keep their smartphones for longer, driven by rising prices as tighter supplies push up memory and other component costs, and incremental hardware improvements that have kept older devices capable for longer. That has given manufacturers fewer opportunities to sell new devices while also reducing the flow of handsets into the booming refurbished market. Analyst firm Counterpoint Research expects the average global replacement cycle to stretch to four years in 2026, up from 3.5 years in 2025.

The trend is evident in the United States, where premium smartphone owners now keep their devices for an average of 42 months, up from 38 to 40 months in previous years, according to market intelligence firm IDC. That has prompted smartphone makers to experiment with leasing, subscriptions, and guaranteed buyback programs.

“These programs fundamentally do not work unless a secondary market exists,” said Max Weinbach, an analyst at Creative Strategies. “The only way to sustain a used or refurbished market is to make sure devices enter that market, and leasing and guaranteed buyback programs make that possible.”

The industry’s challenge, however, is not just to get consumers to upgrade more often — it is also to persuade them that these new ownership models make more financial sense than buying outright.

When leasing makes sense

“Leasing definitely isn’t for everyone, but it can make sense, especially for someone who upgrades often,” Matt Schulz, chief consumer finance analyst at online lending marketplace LendingTree, told TechCrunch. Consumers who keep their phones for three, four, or five years, however, are often better off buying them outright than opting for a subscription or leasing model, he said.

For those who upgrade every year or two, however, the economics can be closer than they appear. “It’s important to stress the fact this is an upgrade program that’s done via a lease, rather than just a leasing program,” Weinbach said. “The intent is that the user will turn in their device every 12 to 36 months because they intend to upgrade regardless.”

Based on his analysis of Apple’s new program, Weinbach told TechCrunch that consumers who already replace their phones frequently could pay roughly the same — or, in some cases, even less — than they would by buying a device outright and trading it in later, particularly on higher-storage models whose trade-in values do not always reflect their higher purchase prices.

The programs, however, are not just about making premium smartphones more affordable. Smartphone makers also see them as a way to keep customers within their ecosystems as devices become more expensive and replacement cycles lengthen.

“The real driver isn’t shorter upgrade cycles; it’s protecting margin and retention as pricing pressure mounts,” IDC’s associate vice president of devices research Navkendar Singh told TechCrunch.

Rather than simply trying to get consumers to replace their phones more often, brands are increasingly trying to turn costly smartphone purchases into more predictable monthly payments that keep customers within their ecosystems, Singh said.

The idea of paying monthly for a smartphone is not new, particularly in the U.S., where wireless carriers have long offered financing and upgrade plans tied to service contracts. However, what is changing is that phone makers are increasingly trying to own that relationship themselves.

Carrier financing has long helped make premium smartphones more affordable in the U.S. “It’s the interest-free financing of 36 months and aggressive trade-ins of up to $1,100 that have made the U.S. the region with the highest smartphone average selling prices,” Nabila Popal, senior research director at IDC, told TechCrunch.

The existing financing and trade-in offers have helped Apple and Samsung dominate the U.S. smartphone market with a combined share of more than 80%, per IDC.

The shift toward subscriptions and other alternative ownership models is also creating opportunities for startups. BytePe, which offers subscription-style plans for smartphones and other consumer electronics in India, said more than 80% of its customers opt for subscriptions over outright purchases or traditional EMI plans.

Founder and CEO Jayant Jha told TechCrunch that BytePe’s typical customers are young professionals in their first or second jobs who want access to premium smartphones without paying the full price upfront or committing to long ownership cycles.

The trend is not limited to the U.S. and India. Companies such as the UK’s Raylo and Germany’s Grover have built businesses around leasing smartphones and other consumer electronics through monthly subscription plans.

Analysts expect more companies to follow. “The primary objective is to increase customer lifetime value by improving retention, creating predictable upgrade cycles and securing a steady pipeline of trade-in devices for certified refurbishment and resale,” Tarun Pathak, research director at Counterpoint Research, told TechCrunch.

Pathak expects such initiatives to become more common in the premium smartphone segment, although he believes financing will remain the more important tool for improving affordability.

Nonetheless, outright ownership is unlikely to disappear anytime soon. Mandeep Manocha, co-founder and CEO of Indian smartphone trade-in and refurbishment platform Cashify, expects leasing, subscriptions, and outright purchases to coexist rather than replace one another.

“All three business models have a place to exist, and they will continue to do so,” Manocha told TechCrunch. “There is a natural transition that may happen from complete ownership to leasing, but it’s a long journey.”

That may be especially true in the U.S., where carrier financing has long dominated premium smartphone purchases.

IDC’s Popal expects Apple’s new Upgrade program to have a bigger impact on Mac sales than iPhones, saying the offering is more likely to expand financing options than fundamentally change how Americans buy their next smartphone.