Apple is at the top of the tech gadget food chain. So if RAMageddon is forcing even the iPhone maker to hike prices and embrace buy now, pay later contracts, you know things must be bad. The company is reportedly partnering with Klarna to keep inducing customers to upgrade their hardware, even as it gets way more expensive.
Bloomberg reports that the new service is planned to launch July 28 and will be available for “most” iPhone, Mac, iPad and Apple Watch models. The buy now, pay later program will be backed by Klarna with repayment plans that vary.
Customers that clear the credit checks will be able to “lease” new iPhones and Apple Watches for 24-month periods, or new Macs and iPads for 36-month cycles. Those who want to pay additional fees can keep the hardware at the end of the subscription-based billing period, or enter a new lease for the latest round of upgrades.
The move comes after Apple raised the prices for some of its most popular products by $100 or more back in June. The MacBook Air, for example, went from $1,100 to $1,300. Even the MacBook Neo, which was an instant hit thanks to its premium-designed budget specs, went from $600 to $700.
“We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable,” outgoing CEO Tim Cook told The Wall Street Journal at the time. “I’ve never seen anything like it in any area in over 40 years.”
Microsoft also partnered with Klarna earlier last month as it raised the price of the flagship Xbox Series X to $800, the third round of price hikes in less than two years, and a $300 increase from the 2020 launch price. The plans offer interest-free financing for up to 12 months, which sounds great, but money isn’t free, and buy now, pay later programs are only profitable to companies like Klarna if some portion of people get caught with outsized bills at the end of the repayment period.
Of course, unlike Microsoft, Apple isn’t one of the tech giants currently responsible for the AI arms race fueling RAMageddon.