Apple upgrade restricted mode will not apply to missed payments
Apple says missed payments under its Upgrade lease program will not trigger limits on device functions, despite iOS beta code findings.
By Hana Yoshida · Markets Reporter
3 min read
Apple upgrade restricted mode concerns eased after the company said devices leased through its new Upgrade program will not have features cut off over missed payments. The statement matters for customers weighing a lease on an iPhone, iPad, Mac or Apple Watch because it addresses whether nonpayment could make a device harder to use.
Apple spokesperson Brian Bumbery told The Verge that the Apple Upgrade program will not place leased devices into a restricted state and will not limit device functions because of missed payments or default. Apple gave that answer after questions arose from code found in a beta version of iOS 27, according to The Verge.
Will Apple restrict leased devices for missed payments?
Apple says it will not restrict the capabilities of devices leased under the Apple Upgrade program because a customer falls behind on payments, according to Bumbery’s statement to The Verge. That includes missed payments and default, the company said.
The question came up after 9to5Mac reported that an iOS 27 beta contained references to a system called “App Managed Features.” The outlet said the code suggested financial partners could run continuing status checks on a device and that Apple system services could place a device into a restricted mode if the owner was not in good financial standing.
According to 9to5Mac, the restricted mode described in the beta code would block access to most apps on an iPhone. The outlet said basic apps such as Phone, App Store, Clock, Settings and Wallet would remain available.
What is the Apple Upgrade program?
The Apple Upgrade program is a leasing plan for Apple hardware, according to The Verge. Apple is working with buy now, pay later company Klarna on the program, which lets customers lease a new iPhone, iPad, Mac or Apple Watch for a flat monthly price with no interest fees, The Verge reported.
The program is separate from the iOS beta code finding, based on Apple’s statement to The Verge. Apple’s position is that missed payments under the Upgrade program will be handled without cutting off device features.
What happens if customers miss payments?
Klarna spokesperson Clare Nordstrom told The Verge that Klarna will terminate the lease agreement if customers miss three payments in a row. Nordstrom said the customer would then have to pay the remaining outstanding balance.
That means Apple’s statement addresses device functionality, while Klarna’s statement addresses the lease contract, according to The Verge’s reporting. Apple says the device will not be placed in a restricted mode for missed payments, and Klarna says repeated missed payments can end the lease and make the balance due.
The clarification leaves the iOS 27 beta code without a stated role in Apple’s Upgrade leasing program. Apple did not say in The Verge’s report what the App Managed Features system may be used for, and the company’s comment was limited to saying the Upgrade program will not impose device-function limits over missed payments or default.
This story draws on original reporting from The Verge.