Lease It, Subscribe to It, or Own It: How Apple and Samsung Are Reinventing the Smartphone Purchase

Apple has launched Apple Upgrade in the United States in partnership with Klarna, allowing consumers to lease an iPhone, Mac, iPad, or Apple Watch for a monthly fee with the option to upgrade, return, or eventually purchase the device. Samsung, meanwhile, has been offering its Galaxy Forever programme in India, combining financing with a guaranteed buyback to let consumers upgrade flagship Galaxy smartphones more predictably. Together, the two moves signal a structural shift in how the world's dominant smartphone brands want customers to think about ownership.

Apple Chief Executive Officer Tim Cook, speaking on the company's earnings call, said the Upgrade programme is intended to make it easier for customers who prefer upgrading on a regular schedule to access Apple's latest products through a leasing plan. Cook also said Apple's relatively high resale values make the model well suited to such arrangements.

The practical stakes here are significant. Analyst firm Counterpoint Research expects the average global smartphone replacement cycle to stretch to four years in 2026, up from 3.5 years in 2025. In the United States specifically, premium smartphone owners now keep their devices for an average of 42 months, up from 38 to 40 months in previous years, according to market intelligence firm IDC. Longer hold times mean fewer sales opportunities for manufacturers and a thinner supply of devices feeding the refurbished market. Leasing and buyback programmes address both problems simultaneously by funnelling used handsets back into a secondary market on a predictable schedule.

For consumers, the financial calculus depends heavily on behaviour. Matt Schulz, chief consumer finance analyst at online lending marketplace LendingTree, said leasing can make sense for frequent upgraders but that consumers who keep their phones for three, four, or five years are often better off buying outright. Max Weinbach, an analyst at Creative Strategies, offered a more nuanced view of Apple's specific programme. "It's important to stress the fact this is an upgrade program that's done via a lease, rather than just a leasing program," Weinbach said. "The intent is that the user will turn in their device every 12 to 36 months because they intend to upgrade regardless." Based on his analysis, Weinbach found that frequent upgraders could pay roughly the same — or in some cases even less — than they would by buying a device outright and trading it in later, particularly on higher-storage models whose trade-in values do not always reflect their higher purchase prices.

The programmes are not purely about accessibility, however. IDC Associate Vice President of Devices Research Navkendar Singh was direct about the underlying motivation. "The real driver isn't shorter upgrade cycles; it's protecting margin and retention as pricing pressure mounts," Singh said. Rather than simply trying to sell more phones, brands are increasingly converting costly one-time purchases into predictable monthly payments that keep customers within their ecosystems — this points to a broader industry recognition that hardware margins alone can no longer anchor long-term growth.

Carrier financing has historically dominated premium smartphone sales in the United States. Nabila Popal, senior research director at IDC, attributed the country's position as the region with the highest smartphone average selling prices to interest-free financing terms of 36 months and aggressive trade-in offers of up to USD 1,100. That infrastructure has helped Apple and Samsung together command more than 80% of the US smartphone market, per IDC. The distinction now is that handset makers are increasingly trying to own the financing relationship themselves rather than ceding it to carriers.

The shift is also opening space for startups globally. BytePe, which offers subscription-style plans for smartphones and other consumer electronics in India, reported that more than 80% of its customers choose subscriptions over outright purchases or traditional instalment plans. Founder and CEO Jayant Jha said BytePe's typical customers are young professionals in their first or second jobs who want access to premium devices without paying full price upfront. In Europe, companies such as the United Kingdom's Raylo and Germany's Grover have built businesses around leasing smartphones and other consumer electronics through monthly subscription plans.

"These programs fundamentally do not work unless a secondary market exists," Weinbach said. "The only way to sustain a used or refurbished market is to make sure devices enter that market, and leasing and guaranteed buyback programs make that possible." Tarun Pathak, research director at Counterpoint Research, echoed that logic, saying the primary objective of such programmes is to increase customer lifetime value by improving retention, creating predictable upgrade cycles, and securing a steady pipeline of trade-in devices for certified refurbishment and resale.

Outright ownership is not going away. Mandeep Manocha, co-founder and CEO of Indian smartphone trade-in and refurbishment platform Cashify, said he expects leasing, subscriptions, and outright purchases to coexist. "All three business models have a place to exist, and they will continue to do so," Manocha said. "There is a natural transition that may happen from complete ownership to leasing, but it's a long journey." Pathak similarly expects financing to remain the more important tool for improving affordability in the near term, even as subscription and leasing initiatives become more common in the premium segment.

IDC's Popal offered a measured outlook on Apple's new programme specifically, expecting it to have a larger impact on Mac sales than iPhones, and suggesting the offering is more likely to expand financing options than to fundamentally change how Americans buy their next smartphone.