Apple’s reported upgrade program revamp could be a big downgrade

Bloomberg’s Mark Gurman reports that Apple is set to announce a new “Apple Upgrade” program (paywalled) next week to replace both its existing financing offerings and the iPhone Upgrade program. Details are still vague at present, but it will supposedly offer lease-style arrangements for not just iPhones, but Macs, iPads, and Apple Watches as well.

I’ve been in the iPhone Upgrade Program since Apple debuted it more than a decade ago. There have been plenty of ups and downs over that time—especially in the early years, when Apple was still figuring out how the whole program worked, but more recently it’s been pretty smooth.

And, I have to say, effective: I’ve had a new iPhone every year, without fail, and I’ve ended up paying only about half of what I would pay for a new phone outright. 1

I do, however, have some concerns about the details Gurman does report. For one, the involvement of Klarna. They’re best known for their buy-now-pay-later service—a realm Apple was prepared to play in but ended up quickly abandoning. At the time I wondered if part of that about-face was Apple “perhaps not wanting to be in a business that can feel a bit troublesome.” But the company still subsequently partnered with other companies that offer that feature, like Affirm and, yes, Klarna.

Unlike the iPhone Upgrade program, this new offering will also reportedly not include AppleCare, meaning that you’ll have to shell out to protect the device you are leasing from Apple. There’s more than a whiff of “services revenue” around that, AppleCare now being somewhat more expensive than it was. No doubt some will choose not to go through the hassle and additional cost of purchasing it, which means a subset of those people will invariably damage their phones and incur additional payments to Apple. AppleCare as part of the iPhone Upgrade Program was fundamentally a good deal because it insured devices that Apple was probably getting back, whether for eventual refurbishment or just for parts.…