Apple is reportedly set to launch a buy now, pay later service in partnership with Klarna, a move that signals the increasing financial strain on consumers looking to acquire new technology. The program, slated to begin on July 28, will extend to most iPhone, Mac, iPad, and Apple Watch models, according to a Bloomberg report. This initiative comes as Apple, along with other major tech companies, faces significant price increases for its products.
Under the new arrangement, customers who pass credit checks will be able to finance iPhones and Apple Watches over 24-month periods, while Macs and iPads can be purchased with 36-month repayment plans. For an additional fee, consumers will have the option to keep the hardware at the conclusion of their lease or enter into a new lease agreement for upgraded devices. This introduces a subscription-like model for acquiring Apple's hardware.
This strategic shift follows a series of price hikes implemented by Apple in June, which saw some of its most popular products increase by $100 or more. For instance, the MacBook Air saw its price jump from $1,100 to $1,300, and the MacBook Neo increased from $600 to $700. Outgoing CEO Tim Cook described the situation as "unsustainable," noting that the company had done its best to absorb the rising costs before passing them on to consumers. "I’ve never seen anything like it in any area in over 40 years," Cook stated.
Microsoft has also recently engaged with Klarna, initiating a similar partnership for its Xbox Series X console. The flagship Xbox console saw its price increase to $800, marking the third price adjustment in less than two years and a substantial $300 rise from its initial 2020 launch price. While these plans often advertise interest-free financing for a period, the underlying profitability for companies like Klarna relies on a portion of consumers being unable to meet the full repayment obligations.
Unlike Microsoft, Apple is not directly implicated in the artificial intelligence-driven market dynamics contributing to the current component shortages and price escalations often referred to as "RAMageddon."