The ‘trap’ in the Apple Upgrade plan isn’t about money

I’m not subscribed to The Atlantic, so I can only refer to this article by Damon Beres — The New iPhone Underclass — Apple’s rental program is a trap — via the parts that John Gruber quoted for his commentary.

In his criticism, Beres points out that:

The Klarna plan — “Apple Upgrade,” which replaces the iPhone Upgrade Program — is truly, legally, a lease. This is confusing! And it’s confusing in part because this is not how Klarna, a well-known buy-now, pay-later service, typically operates: When you use Klarna for clothing from Shein or lip kits at Sephora or an Xbox at GameStop, you’re paying back a loan, exactly as you were in the original iPhone Upgrade Program. Same if you use Klarna to buy a Samsung Galaxy phone. But with Apple Upgrade, you are renting: The Mac or Apple Watch is not yours until the final payment is made.

Gruber remarks:

I don’t think this is confusing at all. Apple Upgrade is the primary brand for this program, not Klarna. Klarna is really only mentioned in the small print. You get into Apple Upgrade through Apple.

And I agree with Gruber here. I don’t think it’s confusing either. But Beres says something worth emphasising here. Probably you’ve already spotted it. I’ll return to it in a moment.

In Beres’ opinion, the Apple Upgrade plan is a trap mainly in the way instalments work:

Consider a student or a young professional, or perhaps an underemployed older one, who needs a new laptop. They decide on a MacBook. Apple Upgrade will appear to be the best deal: In its announcement, Apple offers the example of a 14-inch MacBook Pro that retails for $1,999 but that can be had for a monthly lease. Perhaps this person goes for the two-year term, which has them paying $54 a month. Best Buy, which currently has the same computer on sale for $1,849, offers an 18-month loan repayment with $103 installments. Apple’s deal appears to be cheaper: The 24-month lease adds up to $1,296; Best Buy’s 18-month loan lands at the store’s full retail price of $1,849.

Why does Best Buy’s laptop seem more expensive? It’s because the plan is actually designed for you to fully pay off the device. At the end of the 24-month MacBook Pro lease, meanwhile, the consumer will still owe $703, meaning that the actual total price of the Apple arrangement is $1,999 — higher than Best Buy’s offer.

And again, I have to agree with Gruber when he retorts:

This has nothing to do with the differences between Apple Upgrade’s leasing terms and Best Buy’s 18-month loan. It’s the difference between Apple’s retail price of $1,999 and Best Buy’s $1,849. Guess what? $1,849 is less than $1,999.

Unfortunately, Beres gets lost talking about money and instalments, and things like “Apple’s deal seems to be cheaper”. Meanwhile, perhaps without realising it, he was already en route to a good argument. Let’s go back to the first quote, when at the very end he wrote:

But with Apple Upgrade, you are renting: The Mac or Apple Watch is not yours until the final payment is made.

That’s the point, in my opinion. The ‘trap’ in Apple Upgrade (and in similarly-conceived plans by other companies) is more subtly psychological. Gruber gets it more than Beres:

That’s surely the appeal of this whole thing from Apple’s perspective  —  that leasing entices people to keep starting new leases every two years rather than just sit back and enjoy a fully-paid-for device for a few additional years. I think it’s a stretch to call that a “trap”, though.

But while getting it more than Beres, Gruber is still coy about the crux of the matter — ownership. And that’s why I think we should still call this a ‘trap’, at least in quotes.

I can’t stress the point enough: the Apple device you’re leasing isn’t yours until you fully pay for it. Contractually, there’s a big difference between owning something and renting it. I’m not a lawyer, but when you own a product, you have certain assurances, warranties, and rights you probably don’t have when the same product isn’t technically yours. And until the product isn’t yours, a tech company can potentially find ways to screw you. (If you don’t like my cynical language, I’ll rephrase that with “a tech company can potentially use that to their advantage in various subtle ways”).

If you haven’t noticed, one important current trend in tech is to nudge people away from owning products while normalising subscriptions (paying for access) and product licensing. See for example the recent Sony situation, where the company announced that they’re phasing out physical media for PlayStation games, turning everything to digital by 2028. Tech companies want us to own nothing and rent everything, so they can have the upper hand in this arrangement.

I’m not arguing that the new Apple Upgrade plan can’t be advantageous for customers, especially if your budget is tight, you need to buy a new Mac, and you can’t pay for it upfront. And the fact that, if you choose to keep paying until you own that $1,999 Mac, at the end of the lease period you won’t have paid a dollar more, is without doubt another good thing. But don’t let this distract you from the main issue: you only truly own that Mac when you pay for it in full. And what Apple ideally wants here is that people stop thinking about owning devices and start leasing them indefinitely. The proposition can seem very enticing — you can theoretically keep staying up-to-date by returning your leased Mac before fully paying for it, and just lease a newer Mac; rinse, repeat. This is the behaviour Apple wants to normalise.

I’m sure that this never-ending lease cycle will appeal to specific customer segments (professionals that need to have the most performant Mac at all times — frankly a niche — and those fanboys who are obsessed with always having the ‘latest and greatest’ stuff), but I urge everyone to never lose sight of the matter of ownership. Owning your computers and devices is important — that gives you more rights and more freedom, and I’ll add it’s the best choice from an ethical standpoint.

Also, if you’re a regular Mac user who doesn’t use the Mac for performance-critical tasks, you really don’t need to upgrade it every 1–2 years. Apple Silicon Macs are so brutally performant today that in the sheer majority of cases you will not notice the bump in performance between, e.g., an M4 and M5 Mac. My M2 Pro Mac mini from 2023 is still a very capable machine. Basic tasks are still carried out without lag, I constantly have 10–12 apps simultaneously open for the better part of the day, and I haven’t noticed a glitch or slowdown in more than 3 years of ownership. And this mini still tackles the occasional resource-intensive task (a demanding game, a video-editing session) with aplomb.

Tech companies are quietly and patiently eroding our agency in this increasingly toxic and abusive relationship. In an ideal scenario the two parts should be peers, instead these companies increasingly want us to be a part of their processes. We must think of ourselves and for ourselves first. We must keep establishing boundaries and refuse to play games whose rules are out of our control.