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Apple Leases Its Way to Future Growth
28 Aug
Summary
- Apple is shifting to a leasing strategy for device financing.
- Klarna handles financing, reducing Apple's credit risk.
- The new program aims to support device volumes amid price hikes.
Apple is implementing a new leasing strategy for its devices, including iPhones, Apple Watches, Macs, and iPads. This shift focuses on monthly affordability as hardware costs and prices rise, aiming to maintain device sales volumes.
The Klarna Group plc-backed program allows customers flexibility, offering options to upgrade, purchase, or return devices at the end of a lease. This initiative could also attract new users to the iOS ecosystem and potentially shorten device replacement cycles.
A key benefit for Apple is that Klarna manages the financing relationship. This allows Apple to gain from customer loyalty and sales without the financial risk associated with carrying receivables on its balance sheet.
This strategy change comes as memory shortages are driving up DRAM and NAND prices, leading Apple to increase prices on some products. The upcoming iPhone 18 cycle will be a crucial test for the leasing model's ability to sustain demand against higher upfront costs.
