Apple recently announced its new Apple Upgrade leasing plan, which lets customers pay monthly for an iPhone, iPad, Mac, or Apple Watch through Klarna. The program replaces the long-running iPhone Upgrade Program and expands the option beyond phones for the first time.
However, code discovered by 9to5Mac in an iOS 27 beta raised concerns about what could happen if someone fell behind on payments. The new App Managed Features system appeared capable of checking a customer’s payment status and placing a financed device into Restricted Mode.
Apple has now clarified that the system will not be used for its Upgrade program. In a statement shared with The Verge, Apple spokesperson Brian Bumbery said missed payments or default will not result in Restricted Mode or any limits on device functionality.
What the App Managed Features system was expected to do
As per the 9to5Mac report, Restricted Mode would block access to most apps while keeping basic services such as Phone, Settings, Wallet, Clock, and the App Store available. A separate Partner Finance Lock feature could prevent users from removing the restriction through a factory reset or selling the device while payments are still owed.
Apple’s statement rules out Restricted Mode and other limits on device functionality for missed Apple Upgrade payments. However, the company has not explained why the wider framework exists or whether it will appear in the final version of iOS 27.
Comparable systems already exist in the device-financing market. Google’s Android DeviceLockManager allows finance providers to lock devices after missed payments, while Samsung’s Knox Guard gives banks and carriers tools to restrict devices over overdue payments.
Missing three payments can still end the lease
Apple Upgrade is a lease rather than a traditional installment plan. Klarna owns the device during the agreement, and customers can return it, upgrade, or pay a final fee to keep it once the lease ends. Klarna told The Verge that missing three consecutive payments will result in the lease being terminated. The customer would then need to pay the full outstanding balance.
So while Apple will not lock customers out of their apps, falling behind on payments can still end the agreement and make the remaining amount due immediately. It is still not clear how Klarna will enforce it.