Apple’s new iPhone leasing program in the US has raised questions for Middle East buyers. The concern is that the company could introduce a similar model in the Middle East region, where buy now, pay later (BNPL) services are gaining popularity.
The company launched Apple Upgrade this week, that allow customers in the US to lease devices including iPhones, iPads, Macs, and Apple Watches through monthly payments. The program replaces Apple’s earlier iPhone Upgrade Program and other financing options.
The move shows that Apple is focused on recurring payments and subscription-style hardware access. While the company has not announced plans for an international rollout. However, analysts believe that the Gulf region could be a potential market if the program expands globally.
Under Apple Upgrade, iPhone leases begin at AED 66 ($17.99) per month. Customers can return, upgrade, or purchase their device at the end of the lease period. The new model differs from traditional financing options. Customers do not automatically own the device after completing monthly payments.
Financial adviser Carol Glynn said, “iPhone costs have increased largely in line with inflation over time. They have always been considered expensive by many. However, it’s not just about the phones increasing cost; we need to also consider affordability. With the cost of living increasing globally, people are likely finding it harder and harder to regularly pay $800 to $1,000 for an iPhone every few years.”
“If the customer can’t afford to make this large lump-sum payment at the end of the leasing contract, or misses the deadline before it’s auto-renewed, the option is to lease another device, essentially locking you into more years of monthly payments”, she added.
The leasing approach could help Apple encourage regular device upgrades at a time when consumers are keeping smartphones for longer periods. Glynn highlighted that Apple’s partnership with Klarna allows the company to promote lower monthly payments without managing financing directly. The model also supports Apple’s wider push towards subscription-based services.
“Because Apple partnered with Klarna rather than running the financing in-house, it gets to advertise lower monthly payments without taking on the balance-sheet liability itself,” Glynn added.
The launch comes as Apple faces higher hardware costs linked to increasing prices for memory and storage components. The company has already adjusted prices for some Mac and iPad models while looking for ways to maintain customer demand.
Industry observers believe the Middle East has conditions that could support a similar leasing program. The region has seen growing adoption of instalment-based payment services, including BNPL platforms. Glynn emphasized that the popularity of flexible payment options could make the market suitable for Apple’s leasing model if it becomes available outside the US.
Apple has not confirmed any plans to bring Apple Upgrade to the Middle East or other international markets. The company’s next steps will determine whether the leasing model becomes part of its global hardware strategy.
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