5 ms·

Perhaps because ownership is becoming increasingly out of reach for portions of the population.

by bjtitus 1mo ago

amazingamazing 1mo ago
This is effectively a discount, what’s the problem?
- technothrasher 1mo ago
  Like any lease, it's only a discount if the actual residual value at the end is lower than the agreed residual value at the beginning, something that the leasing company will try hard to make sure isn't the case. In the case here of the iPhone 17 pro, you're leasing it for $768 rather than buying it for $1099. So if the market value of the phone after 24 months is more than $331, it's not a discount. All it does is lower monthly expense, not reduce the effective price of the phone. And unlike most closed end leases, it doesn't seem like you have to option to buy it out, so you can't even partially recover from an unexpectedly high residual value at the end.
  - amazingamazing 1mo ago
    You can buy the phone for the difference in price, so effectively just zero percent loan.
  - freetime2 1mo ago
    > And unlike most closed end leases, it doesn't seem like you have to option to buy it out Reading through the end-of-lease options, this actually seems like a very buyer-friendly leasing program. There is no additional charge for leasing - the cost to buy out the phone at any point is always just the original purchase price minus any lease payments you've already made. And you don't even have to do anything at the end of the lease, they'll just keep charging you normal monthly payments for up to 6 months after the lease ends (after which point they'll just charge you the remainder of the purchase price less any payments you've made). > At the end of your initial lease term, you can do one of the following: > Upgrade and return your current device. > Leave the program and return your current device. > Buy the device outright with a one-time payment from your Klarna account. > If you don’t take any of these actions, your lease will be extended month-to-month for up to six months from the end of your initial lease term to decide which option is right for you. During this time, you’ll be charged your monthly payment until you take action. If a trade-in credit was applied to your lease at the time of enrollment, your payments will also increase during this six-month period because the credit is applied only to your initial lease term. If no action is taken at the end of the six-month period, Klarna will charge you the purchase option fee under your lease to buy the device outright, which equals the full price of the device at lease signing less the sum of lease payments you've already made (plus tax).
- bjtitus 1mo ago
  In the short term at a micro level, not a problem at all for people who can afford the device and probably a better deal. At a macro level, yet another category where prices will continue to increase and buyer reaction will be subdued by lower installments and longer terms. Like 50 year mortgages and 7 year car loans. But of course, this is the point. Phones are a durable good at this point. The focus on services and more financing options are the next levers without innovation.
apple4ever 1mo ago
But this doesn't put it out of reach. You can still own it.

Perhaps because ownership is becoming increasingly out of reach for portions of the population.

by bjtitus 1mo ago

Perhaps because ownership is becoming increasingly out of reach for portions of the population.

amazingamazing 1mo ago

This is effectively a discount, what’s the problem?

technothrasher 1mo ago
Like any lease, it's only a discount if the actual residual value at the end is lower than the agreed residual value at the beginning, something that the leasing company will try hard to make sure isn't the case. In the case here of the iPhone 17 pro, you're leasing it for $768 rather than buying it for $1099. So if the market value of the phone after 24 months is more than $331, it's not a discount. All it does is lower monthly expense, not reduce the effective price of the phone. And unlike most closed end leases, it doesn't seem like you have to option to buy it out, so you can't even partially recover from an unexpectedly high residual value at the end.
- amazingamazing 1mo ago
  You can buy the phone for the difference in price, so effectively just zero percent loan.
- freetime2 1mo ago
  > And unlike most closed end leases, it doesn't seem like you have to option to buy it out Reading through the end-of-lease options, this actually seems like a very buyer-friendly leasing program. There is no additional charge for leasing - the cost to buy out the phone at any point is always just the original purchase price minus any lease payments you've already made. And you don't even have to do anything at the end of the lease, they'll just keep charging you normal monthly payments for up to 6 months after the lease ends (after which point they'll just charge you the remainder of the purchase price less any payments you've made). > At the end of your initial lease term, you can do one of the following: > Upgrade and return your current device. > Leave the program and return your current device. > Buy the device outright with a one-time payment from your Klarna account. > If you don’t take any of these actions, your lease will be extended month-to-month for up to six months from the end of your initial lease term to decide which option is right for you. During this time, you’ll be charged your monthly payment until you take action. If a trade-in credit was applied to your lease at the time of enrollment, your payments will also increase during this six-month period because the credit is applied only to your initial lease term. If no action is taken at the end of the six-month period, Klarna will charge you the purchase option fee under your lease to buy the device outright, which equals the full price of the device at lease signing less the sum of lease payments you've already made (plus tax).
bjtitus 1mo ago
In the short term at a micro level, not a problem at all for people who can afford the device and probably a better deal. At a macro level, yet another category where prices will continue to increase and buyer reaction will be subdued by lower installments and longer terms. Like 50 year mortgages and 7 year car loans. But of course, this is the point. Phones are a durable good at this point. The focus on services and more financing options are the next levers without innovation.

apple4ever 1mo ago

But this doesn't put it out of reach. You can still own it.