Klarna Shares Jump 9% on Report of Apple Device Leasing Partnership

Shares of Swedish fintech company Klarna jumped 9% on Tuesday following a report that it will partner with Apple Inc. on a new device leasing program. The collaboration, reported by Bloomberg, positions Klarna as the financial backer for the tech giant's new hardware subscription service, dubbed "Apple Upgrade."

Program Details

According to the report, the new service is scheduled to launch on July 28, initially in the U.S. for purchases made online and in Apple's retail stores. The program will function as a subscription, allowing customers to lease a range of Apple products.

• Eligible Devices: Most iPhone, Mac, iPad, and Apple Watch models.
• Lease Terms: 24 months for iPhones and Apple Watches; 36 months for Macs and iPads.
• Financing: Klarna will manage the financial arrangements, which will require customers to be approved through a soft credit check.

Market Impact and Strategy

The partnership allows Apple to offer a flexible hardware leasing option without directly assuming the associated credit risk. This move follows Apple's decision to shelve plans for an in-house hardware subscription program in 2024. By outsourcing the financing to a specialist like Klarna, Apple can focus on its core product business while still providing an attractive payment option to consumers.

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For Klarna, the deal represents a significant partnership with one of the world's largest consumer technology firms, potentially driving substantial volume through its platform. In addition to Klarna's 9% stock surge, Apple shares also ticked higher following the news.

Changes to Existing Offerings

The new "Apple Upgrade" program will reportedly replace Apple's current iPhone Upgrade Program and its standard financing options, for which new enrollments will be discontinued. The company is expected to market the new leasing service as offering lower payments.

However, the report notes that the new program will not include AppleCare coverage. Certain devices, including the Apple Watch SE and the entry-level iPad, are also said to be excluded, as are purchases made for business or education.