Smartphone Makers Turn to Leasing and Subscription Models

Apple introduced the Apple Upgrade program in the United States, partnering with Klarna to let consumers lease an iPhone, Mac, iPad or Apple Watch for a monthly fee with the option to upgrade, return, or eventually purchase the device. Samsung is running a similar Galaxy Forever program in India that blends financing with a guaranteed buy-back, allowing predictable upgrades of flagship Galaxy phones.

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Analyst firm Counterpoint Research projects the average global replacement cycle will stretch to four years in 2026, up from 3.5 years in 2025. In the United States, IDC reports premium-smartphone owners now keep devices for an average of 42 months, up from 38–40 months in prior years. The slowdown reduces manufacturers’ opportunities to sell new handsets and shrinks the flow of devices into the refurbished market, prompting experiments with leasing, subscriptions and guaranteed-buy-back schemes.

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Apple CEO Tim Cook said the Upgrade program is meant to make it easier for customers—especially frequent upgraders—to access the latest products through a leasing plan, noting Apple’s high resale values support the model. market share of more than 80 percent.

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India-based BytePe reports over 80 percent of its customers choose subscription plans over outright purchases or traditional EMI. Founder and CEO Jayant Jha says the service targets young professionals seeking premium phones without full upfront cost. Counterpoint research director Tarun Pathak expects such initiatives to grow in the premium segment, though he believes financing will remain the dominant affordability tool. Cashify co-founder Mandeep Manocha cautions that “all three business models have a place to exist, and they will continue to do so,” foreseeing a gradual, long-term shift rather than an immediate replacement of outright ownership.

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• “These programs fundamentally do not work unless a secondary market exists,” — Max Weinbach, an analyst at Creative Strategies

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• “It’s important to stress the fact this is an upgrade program that’s done via a lease, rather than just a leasing program,” — Max Weinbach, an analyst at Creative Strategies

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• “It’s the interest-free financing of 36 months and aggressive trade-ins of up to $1,100 that have made the U.S. the region with the highest smartphone average selling prices,” — Nabila Popal, senior research director at IDC

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• “The primary objective 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,” — Tarun Pathak, research director at Counterpoint Research

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• “All three business models have a place to exist, and they will continue to do so,” — Mandeep Manocha

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