Klarna's Apple Partnership Could Unlock Huge Revenue Potential

Apple has launched its new leasing program, Apple Upgrade, which allows customers to pay low monthly payments for the latest devices. The company's partner for this initiative is Klarna, a leading buy-now, pay-later (BNPL) financing provider. According to Apple, payments start at $17.99 per month and leases run 12-24 months for iPhone and Apple Watch products, while Mac and iPad leases last 24-36 months.

The average traded-in iPhone today is about 3.6 years old, according to Assurant data. This means customers could upgrade their iPhones twice as often as they do today, which could be a major boost to Apple's new device sales. However, the biggest winner here might not be Apple but its leasing partner Klarna.

Klarna makes money from this partnership in two main ways: through merchant fees for providing the financing and by refurbishing and reselling devices that get returned at the end of their lease. These income streams could become a significant contributor to Klarna's business over the next few years, especially considering Apple generated more than $200 billion in sales last year from the iPhone alone.