The smartphone industry is increasingly shifting from traditional outright purchases to subscription and leasing models as a way to address rising device costs and longer upgrade cycles. Apple recently introduced its Apple Upgrade program in the U.S., partnering with Klarna to offer monthly leasing options on iPhones and other Apple products, enabling users to upgrade, return, or buy devices over time. Samsung has also implemented similar initiatives, such as its Galaxy Forever program in India, which combines financing and guaranteed buyback offers to facilitate predictable upgrades. These programs cater to consumers who prefer frequent upgrades but face premium smartphone prices and lengthening replacement timelines.

This trend is driven in part by consumers holding onto their devices longer, with research showing the average replacement cycle expanding to four years globally in 2026, up from 3.5 years in 2025. U.S. premium smartphone users now keep devices for approximately 42 months. To incentivize more frequent upgrades, manufacturers are experimenting with leasing and guaranteed buyback plans that rely heavily on a robust secondary market for refurbished devices. Analysts note that such programs are designed for customers who intend to trade in devices every one to three years, making subscription models potentially financially comparable to or better than outright purchases for frequent upgraders.

Beyond affordability, these new ownership models help companies like Apple and Samsung maintain customer loyalty and protect profit margins as device costs rise and upgrade intervals lengthen. Instead of outright ownership, smartphones are becoming part of predictable monthly payments that secure ongoing relationships within the companies’ ecosystems. While wireless carriers have long offered device financing tied to service contracts, handset makers are now seeking to control these financing and upgrade experiences directly, capitalizing on trade-in incentives and interest-free financing to sustain high average device selling prices.

Despite the growing subscription trend, outright purchases and traditional financing are expected to remain relevant, with all models coexisting in the market. Startups offering phone subscriptions in various countries reflect diverse consumer preferences, particularly among younger professionals seeking premium devices without upfront costs. Experts predict that subscription and leasing options will expand, especially in the premium segment, but financing will continue to play a key role in improving affordability. Apple's program may have a larger impact on Mac sales than iPhones, signaling gradual shifts rather than abrupt changes in how consumers acquire their smartphones.