AT&T Cuts Pricing on 'AT&T Next' Smartphone Upgrade Program, iPhone Now $1/Year Cheaper Than Verizon

Discussion in 'iOS Blog Discussion' started by MacRumors, Aug 9, 2013.

  1. macrumors bot


    Apr 12, 2001

    Following a strong backlash after the introduction of its AT&T Next smartphone upgrade program, AT&T has cut pricing on a number of devices in the program, including the iPhone.

    Previously, the iPhone cost $32.50 per month under AT&T Next, making it more expensive than comparable plans from Verizon and T-Mobile. Now, however, the 16GB iPhone can be had for $27 per month -- one dollar per year cheaper than under a comparable Verizon plan.

    Through the program, customers end up double paying for their devices through both the new monthly handset payments and the portion of the monthly service charge that has traditionally been collected by the carrier to recoup its upfront handset subsidies. Assuming that $20 of AT&T's monthly service fees go toward recouping the carrier's handset subsidy, a customer looking to upgrade after 12 months would have paid $324 in device payments on a 16 GB iPhone 5 and $240 from monthly service fees, yielding total payments of $564 for the $650 device, although they also have to turn in the device to AT&T.

    Verizon's Edge program appears to work in a similar manner, and now, for a similar price. Splitting the $650 iPhone cost over 24 months yields monthly payments of just over $27, and thus a customer looking to upgrade after 12 months would have paid $325 in device payments and $240 from monthly service fees, making for total payments of $565 plus the device trade-in.

    Article Link: AT&T Cuts Pricing on 'AT&T Next' Smartphone Upgrade Program, iPhone Now $1/Year Cheaper Than Verizon
  2. macrumors regular


    Apr 18, 2006
    The reason there hasn't been any comments on this yet is because everybody is still figuring out the math
  3. macrumors 6502a

    May 3, 2011
    This is petty competition. $1 cheaper? Yes they can say they're cheaper but the consumer isnt really saving anything/
  4. macrumors 6502

    May 22, 2007
    Haha, Oh my these telcos are so repulsive. AT&T's bean counters must be patting themselves on the back for undercutting Verizon a whole dollar. Little Ralphie must be proud of their brand of "competition".
    I personally have moved on to Tmobile and am not looking back. Separating device cost from service is the way to go.
  5. macrumors 65816

    Oct 5, 2011
    San Francisco, California
    LOL. No thanks, AT&T!

    Hurry, this 0.2% savings may not last long!
  6. macrumors 603


    Apr 1, 2009
    15 minutes in the future
    Wth AT&T and Verizon, you pay the same amount per month as people who are getting the phone significantly cheaper. This is pointless.
  7. macrumors 68020


    Jun 22, 2006
    The thick of it
    If the DoJ wants to investigate collusion, forget about books. Why aren't they turning their attention to the telecoms?

    Oh, that's right -- there's competition: T-Mobile...
  8. macrumors 603

    Jun 19, 2009
    t-mobile is not any cheaper once you figure in the price of the phone and the amount of LTE data you get
  9. macrumors 68020


    Mar 23, 2006
    Oh yeah! Finally a sweet deal from AT&T! Time to trade in!
  10. macrumors 603


    Nov 5, 2009
    Good to know these guys are still using their snake oil salesman experience to this day.

    No thanks AT&T, no thanks.
  11. macrumors 68030


    Mar 25, 2011
    Not true!
  12. macrumors 68030


    Jul 19, 2013
    Western United States
  13. macrumors 68000


    Jun 14, 2003
    So you're paying $324 for a $199 device just so you can upgrade a year early. Works only if it's in your budget.
  14. macrumors newbie

    Jul 17, 2013
    No thanks

    I currently am "upgrade eligible" with ATT and fully free Oct 1, so shopping. One thing is abundantly clear, even if wife and I liked our phones, must upgrade Oct 1 as rates are not going down when phone payment obligation is complete. It just becomes excess profit for the carrier.

    Looked at the NEXT and Edge and immediately said "no thanks". The sell it on 'new phone every year' as if you need a new phone. As the math noted earlier, the 1 year payment almost paid fully for the phone, but given the resale value of the mandatory trade-in, ATT/Verizon will actually make more. An easy no thanks.

    At least T-Mobile drops the monthly phone payment charge when paid for, and talk/data becomes significantly cheaper. It is nice that they itemize it out - and $0 if you bring your own. The also have a Jump program for new phone up to twice a year, but so turned off by NEXT and Edge that didn't explore it. Just don't know about T-Mobile network speed as sales people at stores that carry all three networks consistently bash T-Mobile over that issue, pushing ATT or Verizon. Of course, they could be getting a bigger bonus from ATT or Verizon.

    Waiting for Oct 1...and perhaps a new iPhone will be announced. Even if not available Oct 1, I could delay a few months I I knew it was coming.
  15. macrumors 68040

    Dec 18, 2012
    Charlotte, NC
    False. AT&T and Verizon don't even offer a data plan that competes with their unlimited data plan.
  16. RF9, Aug 9, 2013
    Last edited: Aug 9, 2013

    macrumors member

    Jul 8, 2008
    Well this plan only works if you're upgrading annually. It is completely pointless if you upgrade every 2 years or more.

    The way to compare it is:
    $324 per year for a new phone every year.
    $199 for a phone the first year and $650 for a phone on your 2nd year.

    So compare:
    $650 out of pocket vs $850 for annual upgrades.

    At this point, don't confuse yourself with in the built in $20 month subsidy in the bill because that's already figured in at this point.

    Why AT&T Next is a ripoff:
    1) You don't keep the old phone. This becomes basically a lease.
    2) Eventually you have to "exit" the program and pay off the final device which you'll keep. This is effectively overpaying by hundreds of dollars because you're not getting any advantage of subsidy.
    3) If you just buy your phones every year and sell the old one, it would cost you less.
    A) Buy Phone #1 at $199.
    B) Buy your upgrade (#2) at $650, sell the old one for about $300.
    C) Over 2 years it cost you about $550 to buy and sell the old phone vs $650 to be on AT&T Next (aka $275/yr vs $325/year.) And should you decide to not upgrade every year, you aren't penalized. Selling on for $300 on a 1 year old iPhone is almost hassle so there's no excuse to make these numbers work.

    Also, AT&T will give you 1/2 subsidy to upgrade early (after 12 months.) So instead of paying $199 you'd pay $399 if you upgrade at 1 year. AT&T gives you $450 subsidy per year (or $225 per year as early upgrades.)

    So by that math, you'd be paying $400 per year to OWN and keep devices (after the first year at $199) vs paying $325 per year on AT&T Next where you do NOT keep your devices. And remember you can always sell that old phone for about $300 on gazelle making it again better/cheaper to buy than use Next.

    The scarry thing about Next is that you have to commit to upgrading every year or it's a complete ripoff. Also if you lose that iPhone (or it's stolen) I believe you simply have no choice than to pay it off. You would have paid full price for the phone without getting the advantage of that $450 subsidy. I don't know if Next has any kind of deductible (insurance wise) that makes it so you can get a new phone.

    Also under Next there is no contract and therefore not ETF. But paying the ETF on a 2 year contract isn't any worse than just paying full price for the phone which is what you'd don on Next (because you're "exiting" the upgrade program.)

    No, I haven't put any thought in to this at all /s
  17. fr33 loader, Aug 9, 2013
    Last edited: Aug 9, 2013

    macrumors regular

    Jul 25, 2007
    Haha. I know the feeling. I hated that when I was completely eligible and I'm in the middle of once a year iPhone transition. "Should I get the 8 month old iPhone or should I wait for an unknown iPhone that may come out in the next 4 months while paying extra to AT&T for that 4 months? ". In android, when your contract expires, there's always a couple months old handset from >insert maker here< or a new one next month if you're willing to wait. What eventually hooked me though was the bigger screen.
  18. macrumors 601


    Jan 6, 2004
    Western US
    What a deal. I think I will dump my excellent Verizon coverage for crappy, completely unreliable AT&T coverage just so I can cash in on that sweet, sweet $1 bonus. :rolleyes:
  19. macrumors regular

    Apr 27, 2013
    The District
    It's not a $199 device, it's a $600 device. Either way, it's still a scam.
  20. pmz
    macrumors 68000

    Nov 18, 2009
    I don't see how this benefits anyone, even people who want to upgrade every 12 months.

    Even If I pay $399 up front for the phone (partial subsidy), which I'm entitled to every 12 months anyway, I OWN the phone. AND, come next year, I can sell the phone for around the same amount on Ebay (even used, an iPhone that was $650 new goes for $400+ used a year later).

    So effectively, the second upgrade is FREE after you sell your previous 12-month-old phone to pay for it.
  21. RF9, Aug 9, 2013
    Last edited: Aug 9, 2013

    macrumors member

    Jul 8, 2008
    I've done comparisons of AT&T share everything with 2 iPhones vs T-Mobile's share plans with 2 iPhones and when you consider that $20/month goes toward a $450 discount for phone purchase on AT&T that you don't get on T-Mobile, T-Mobile is basically the same price as AT&T.

    Eg: $150/month on AT&T for share everything for 2 iPhones vs $110 on on T-Mobile is the same price when you consider $40/month on AT&T is subsidizing your phone. (On T-Mobile you pay $650 for a phone, on AT&T you pay $199.)
    Now this isn't a true apples to apples comparison of plans, but it's close and what I'd choose. T-Mobile also offers unlimited data, so if you use a lot of data T-Mobile is all of a sudden a better value.

    Also consider this: AT&T is technically a better/bigger network than T-Mobile, so I personally expect to pay more for AT&T than T-Mobile and more for Verizon than AT&T if you consider network size.
    But network performance totally "depends" on your situation, location, and needs and no one network is better everywhere. Eg: In Washington DC AT&T is better than Verizon, but in Northen California Verizon is literally the only one who has service in some rural areas.
    Now that's for simply paying for phones. When you involve these upgrade programs T-Mobile's is a win because there is no penalty if you don't upgrade annually or choose to leave the carrier (because there's no hardware cost built in to the plan.) Also, T-Mobile's plan is actually also insurance (with a deductible mind you) but I don't recall seeing any kind of insurance scenario on AT&T Next.
    The other way to look at is is that if you pay $10/month for insurance on T-Mobile you're getting an early upgrade advantage as a perk.

    Of course one could pay $100 for Applecare instead and get some of the same protections.
  22. macrumors 601


    Oct 1, 2010
    Don't see any reason not to pay full price and sell my phone when I am ready to upgrade.

    Cheaper overall and with more brainer.
  23. macrumors 68020

    Nov 10, 2007
    Hey look. Randall Stephenson has a Macrumors login. How are you this evening, Randy, boy?
  24. macrumors 601


    Dec 8, 2011
    East Central Florida
    For GSM yes

    folks that need verizon have it more rough
  25. macrumors 603


    May 21, 2012
    Get the subsidized phone, sell it in 12 months. You'll be better off.

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