Samer Choucair: Apple Is Reinventing Its Revenue Model from Device Ownership to a Service Economy
Investment strategist Samer Choucair said Apple’s shift toward leasing its devices through monthly subscription payments represents a strategic transformation in the business model of consumer technology companies.
He noted that the move to transform devices from one-time purchases into services generating recurring revenue could reshape the economics of device spending and change how investors value companies operating in the sector.
Choucair explained that Apple entered a new phase of its business model with the launch of the “Apple Upgrade” program in the United States at the end of July 2026, in partnership with Klarna. The program allows customers to lease iPhones, Apple Watches, iPads, and Macs for monthly payments starting at $17.99 for iPhones, $11.99 for Apple Watches and iPads, and $24.99 for Macs.
He noted that the program replaces previous upgrade and installment plans and gives customers several options when the lease term ends, ranging from 12 to 36 months depending on the device. Customers can upgrade to a new device, purchase the leased device, or return it.
Choucair emphasized that this is not simply a change in payment method, but rather part of a broader shift toward a “devices-as-a-service” model, in which the relationship between the consumer and the company continues beyond the initial transaction instead of ending when the device is purchased.
Devices as a Service and a Structural Shift in Revenue
Choucair explained that the transition comes amid rising costs for key consumer-electronics components, particularly memory chips, which have pushed the prices of several Mac and iPad models higher.
He noted that leasing can reduce the psychological barrier to purchasing by converting the cost of a device into a smaller monthly payment compared with some traditional financing options. At the same time, however, it transforms the purchase into a recurring financial commitment extending over a longer period.
Choucair said this model could give Apple greater ability to retain customers within its ecosystem for longer periods, while also improving its ability to manage upgrade cycles and recycle returned devices through refurbishment and resale channels.
He added that retaining users within Apple’s ecosystem has implications beyond the device itself, as it could support the growth of services and digital-product revenue, particularly when customers continue using the platform even if they do not directly own the hardware.
Choucair emphasized that the shift also reflects a change in how major technology companies think about capital allocation. Markets increasingly favor recurring revenue streams with greater predictability over periodic hardware sales, which can be more exposed to fluctuations in demand and component costs.
He said institutional investors will pay particular attention to the percentage of customers who transition from leasing to outright ownership, as this could become an important indicator of the sustainability of the new cash-flow model and its ability to generate incremental value for Apple.
Reshaping the Valuation Framework for Technology Companies
Choucair said Apple’s program could reorder valuation priorities across the consumer-technology sector, particularly for investment funds and financial markets that traditionally distinguish between recurring revenue and conventional hardware sales when valuing companies.
He explained that recurring revenue often commands higher valuation multiples than hardware sales because it provides greater visibility into future cash flows.
According to Choucair, if the “Apple Upgrade” program succeeds in expanding its subscriber base, it could support Apple’s medium-term valuation, particularly if the company eventually expands the model beyond the United States.
He added that geographic expansion will be a key factor in determining the program’s financial impact. Success in the U.S. market would provide an initial testing ground before the model is introduced into markets with different consumer, credit, and regulatory characteristics.
Choucair said investors will need to monitor several indicators, including program adoption, customer retention within the leasing model, upgrade rates, device-return rates, the impact on services revenue, and changes in average revenue per user.
Growth Opportunities in Gulf and Emerging Markets
Choucair explained that the leasing model could create similar opportunities in emerging and Gulf markets, where installment-payment and leasing systems are becoming more widespread and consumers increasingly prefer to spread the cost of technology products across monthly payments.
He noted that these trends intersect with Vision 2030’s focus on the digital economy and broader access to advanced technologies, potentially making devices-as-a-service models more suitable for expansion across the region.
According to Choucair, the Gulf—with relatively high income levels, widespread digital services, and increasingly sophisticated financial and electronic-payment infrastructure—could become an attractive market for such models if global technology companies decide to expand them beyond the United States.
He emphasized that the program is currently limited to the U.S. market, meaning its initial financial impact will be concentrated on Apple’s dollar-denominated revenue streams and quarterly earnings expectations.
Choucair added that expansion into Gulf and emerging markets would require adaptation to local regulatory and financial frameworks, including credit requirements, consumer-protection rules, financing structures, and payment mechanisms.
Credit Risk and Revenue Sharing
Choucair cautioned that the success of the leasing model will depend not only on Apple’s ability to attract consumers, but also on effective management of credit risk through its financial partner.
He said rising default rates during economic slowdowns could represent a major risk for investors, particularly as purchasing a device evolves from a single transaction into an extended financial relationship.
Choucair noted that partnering with a financial institution such as Klarna adds a financial dimension to Apple’s business model, making credit-risk management and the quality of the financing portfolio important factors in determining the program’s success.
He added that Apple will also need to preserve its profit margins while sharing part of the economics with the financing partner. As a result, the cost structure and revenue-sharing arrangement will be critical in assessing the program’s true impact on earnings.
Ultimately, Choucair said, the success of the model will depend on Apple’s ability to strike a balance between lowering the financial barrier for consumers and maintaining profitability, margins, and the strength of its brand.