Apple and Samsung push leasing and subscriptions as phone upgrade cycles stretch to four years

Apple, Samsung and the Industry-Wide Push From Phone Ownership to Subscriptions

Apple this week launched Apple Upgrade in the United States, in partnership with Klarna, letting consumers lease an iPhone, Mac, iPad or Apple Watch for a monthly fee with the option to upgrade, return or eventually buy the device. It is the latest sign that the smartphone industry's next battleground is no longer just the hardware — it is how customers pay for it.

The move is part of a broader push. Samsung has been running its Galaxy Forever program in India, which combines financing with a guaranteed buyback to make flagship upgrades more predictable. On Apple's earnings call this week, CEO Tim Cook said the Upgrade program is meant to make it easier for customers who prefer upgrading on a regular schedule to get the company's latest products, and he argued that Apple's relatively high resale values make the device well suited to leasing.

The timing reflects a market where consumers are holding onto phones longer. Counterpoint Research expects the average global replacement cycle to stretch to four years in 2026, up from 3.5 years in 2025, while IDC says premium smartphone owners in the U.S. now keep devices for an average of 42 months, up from 38–40 months in previous years. Rising component costs and increasingly incremental hardware improvements are behind the trend — and they have squeezed sales of new devices while reducing the flow of older handsets into the refurbished market.

Analysts argue these programs only work because a secondary market exists, and that affordability is not the whole story. IDC's Navkendar Singh told TechCrunch the real driver is protecting margin and retention as pricing pressure mounts. U.S. carriers have long dominated phone financing with 36-month interest-free plans and trade-in offers worth up to $1,100, which IDC credits with giving the U.S. the world's highest average smartphone selling prices — and with helping Apple and Samsung hold a combined market share above 80%. Startups such as India's BytePe, the UK's Raylo and Germany's Grover are already built around the subscription model.

Lease-vs-Buy Math, Margin Protection and the Refurbished-Market Engine

Apple's Program Is About Margins and Retention, Not Just Affordability

Tim Cook framed Apple Upgrade as convenience for regular upgraders, but the program's economics point to a larger goal. IDC's Navkendar Singh told TechCrunch that the real driver is protecting margin and retention as pricing pressure mounts. A lease converts an occasional, high-ticket purchase into predictable monthly revenue, keeps customers inside Apple's ecosystem, and — as Cook noted — leans on Apple's strong resale values, which lower the risk of a device losing value faster than the lease earns it back. Samsung's Galaxy Forever follows the same logic in India.

The Math Favors Frequent Upgraders — Especially on High-Storage Models

Creative Strategies analyst Max Weinbach found that consumers who replace their phones every 12 to 36 months could pay roughly the same — in some cases less — under Apple's lease than by buying outright and trading in later, particularly on higher-storage models whose trade-in values do not always reflect their higher purchase prices. LendingTree's Matt Schulz draws the opposite conclusion for longer hold times: consumers who keep phones three, four or five years are usually better off buying outright. In other words, the new programs are priced to win the upgrade-every-two-years customer while doing little for the majority who hold devices longer. The catch is that Apple has not disclosed full lease pricing, so the comparison rests on the analyst's modeling.

A Refurbished-Market Engine — and a Challenge to Carrier Financing

Weinbach's warning that these programs fundamentally do not work without a secondary market is the crux of the business case. Leasing guarantees a steady pipeline of lightly used devices, which Counterpoint's Tarun Pathak says is a core objective: higher customer lifetime value, predictable upgrade cycles and supply for certified refurbishment and resale. That is the model BytePe has validated in India — more than 80% of its customers choose subscriptions over outright purchase or traditional EMI plans — and it is what Raylo and Grover are scaling in Europe. In the U.S., however, carriers already own the financing relationship, which is why IDC's Nabila Popal expects Apple Upgrade to have a bigger impact on Mac sales than on iPhones. Cashify's Mandeep Manocha expects leasing, subscriptions and outright ownership to coexist for a long time to come.

What the Subscription Shift Means for Phone Buyers and the Industry

If you're a phone buyer:

• Upgrade every 12–36 months and lean toward high-storage models? A lease like Apple Upgrade can cost roughly the same — sometimes less — than buying outright and trading in later, according to Creative Strategies' Max Weinbach; weigh the full monthly cost against your current buy-and-trade-in pattern.
• Keep phones three to five years? Buying outright is usually the cheaper route, says LendingTree's Matt Schulz — a lease mostly pays for upgrade flexibility you will not use.
• U.S. shoppers should benchmark any manufacturer lease against what carriers already offer: 36-month interest-free financing with trade-ins up to $1,100, which IDC says have produced the world's highest average smartphone selling prices.

If you work in the industry:

• Leasing economics stand or fall on resale values and a functioning secondary market; makers and refurbishers such as Cashify should plan around lease returns as a steady supply of devices for certified resale — the pipeline Counterpoint's Tarun Pathak describes.
• Counterpoint expects leasing initiatives to expand within the premium segment before cheaper tiers, and IDC's Nabila Popal expects Apple Upgrade to move Macs more than iPhones in the U.S. — a useful test of how far the model can go beyond carrier-dominated phone financing.