The Apple Upgrade Situation

Michael Lopp, at Rands in Repose: I have felt since it was announced that the Apple iPhone Upgrade Program has not just been a deal, but a steal. The specifics: You apply for a loan for a full-price iPhone at 0%. If approved, your payments are split over 24 months. Pay for 24 months, and the phone is yours. That was just the deal; the steal was that it was low effort every single year to get a new phone. I’d re-up for a new phone, and Apple would forgive the remaining payments of the loan because I’d signed up for another 24 months. Oh, and bonus, AppleCare was included, which was a total steal because I hate iPhone cases (iPhones are designed to be felt) and, uh, also I have been known to drop my phone. [...] At first glance, the new plan looks cheaper. The original plan: one year of iPhone 17 Pro (256GB, $1,099 sticker) was ~$57/month. 12 payments, trade-in, restart: ~$684 for the year. The new one, same phone: $45.99/month on the 12-month lease: $552 for the year. But wait! The first and most important change to the new plan is that AppleCare is no longer included. Adding it back to this phone at $13.99/month: $720 for the year. That’s probably the single best argument for “the catch” in the new plan. The old iPhone Upgrade Program included AppleCare coverage, and the new Apple Upgrade leases do not. Personally, I haven’t purchased AppleCare for any device, for me or my family, since I got it for my college Macintosh LC in 1991. Apple products come with good warranties. I’ve saved thousands of dollars in the intervening decades by never paying for AppleCare and instead paying for very occasional repairs out of pocket. (I’ve twice cracked my iPhone screen and paid to have it replaced.) But I know that some people wouldn’t even consider buying an iPhone (in particular, as a potentially dropped device) without AppleCare. Update: Lopp’s AppleCare math is for monthly AppleCare; if you pay annually ($139, for a $1,099 iPhone) then the annual cost for the monthly Apple Upgrade payments plus AppleCare is $691 — which is very close to the $684 annual cost for the old iPhone Upgrade Program.  ★