Apple will launch a new “Apple Upgrade” leasing program later this month, according to a new report from Bloomberg. It marks “one of the biggest-ever changes to how the company sells devices,” the report says.

Here’s how it will work.

Lower monthly payments for hardware purchases

Apple is teaming up with Klarna to power the new Apple Upgrade program. It will require a soft credit check for shoppers.

Apple Upgrade will reportedly work “like a subscription” for iPhone, iPad, Mac, and Apple Watch purchases. There will be some limitations, though. The report says the Apple Watch SE, base model iPad, iPhone 16, and MacBook Neo won’t be eligible for Apple Upgrade.

iPhone and Apple Watch leases will reportedly run for 24 months, while Mac leases will run for 36 months.

Mark Gurman explains:

The Apple Upgrade service will work like a subscription and users can pay off the device early during their term, upgrade early to a new model or keep it at the end of the leasing period. In certain cases, those transactions will incur an additional fee. Like a car lease, it can also be returned at the end of the term.

Apple Upgrade doesn’t include AppleCare coverage, unlike the iPhone Upgrade Program. In fact, Bloomberg says Apple is planning to discontinue new signups for the iPhone Upgrade Program as part of the launch of Apple Upgrade.

Apple Upgrade will reportedly launch one week from today, on July 28.

Apple raised prices for iPads and Macs last month, while the new iPhones launching in September are also expected to be more expensive. Apple Upgrade will give customers a way to weather those higher prices if they so choose.

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