Apple Taps Klarna for Leasing Strategy Amid Rising Hardware Costs

Apple's stock price rose in premarket trading on August 28 as investors weighed the company's new leasing strategy. This shift towards leasing comes amidst higher hardware costs and potential price increases, with a focus on monthly affordability.

According to Counterpoint Research analyst Maurice Klaehne, the Apple Upgrade program, backed by Klarna Group plc (NYSE:KLAR), could help protect device volumes as prices rise while encouraging customers to choose higher-priced configurations.

The program allows customers to upgrade, buy their existing device, or return it when the lease ends for iPhone, Apple Watch, Mac, and iPad. Klaehne sees this as a way to attract first-time iOS users and Android switchers, potentially shortening replacement cycles.

Klarna handles the financing relationship, allowing Apple to benefit from customer loyalty and device sales without carrying receivables or credit risk on its balance sheet. This is significant, as memory shortages drive DRAM and NAND prices higher and Apple raises prices across parts of its product lineup.