Anyone else feel forced not to waste their subsidy, but are attached to their 5/5s?

Discussion in 'iPhone' started by easy-peasy, Mar 21, 2014.

  1. easy-peasy macrumors regular

    Joined:
    Jan 31, 2014
    #1
    Basically my feelings are that I love my iPhone 5s and don't want to get rid of it (even for the iPhone 6)... yet, I feel like I'm throwing away a $450 subsidy if I don't use it to upgrade when it is available.

    Then, I think that I'm so attached to my 5s that I'll just buy the 6 on launch day and sell it for $750+ on craigslist... but then I worry that I would regret not having the 6 down the line.

    I'm just confused :(

    :inserts FWP meme:
     
  2. maflynn Moderator

    maflynn

    Staff Member

    Joined:
    May 3, 2009
    Location:
    Boston
    #2
    Why commit to a two year contract, spending 200 (if not more for the larger storage models) for a phone if you have no need for such a phone?

    I'd say its not a waste, but rather pretty smart.
     
  3. Newtons Apple macrumors Pentium

    Newtons Apple

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    Mar 12, 2014
    Location:
    Jacksonville, Florida
    #3
    You need to do what you want and not what the carrier is trying to make you do.
     
  4. CEmajr macrumors 601

    Joined:
    Dec 18, 2012
    Location:
    Charlotte, NC
    #4
    Yeah if you buy subsidized then it's foolish to not use it when available. Go with the option of buying the 6 and sell it for $700 on Craigslist like you said above if you want to keep your 5S.
     
  5. The Doctor11 macrumors 603

    The Doctor11

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  6. T5BRICK, Mar 21, 2014
    Last edited: Mar 21, 2014

    T5BRICK macrumors 604

    T5BRICK

    Joined:
    Aug 3, 2006
    Location:
    Oregon
    #6
    Get out of the subsidy pricing model and buy your phones outright. I did and now I plan on keeping my 5s for longer than I've kept previous iPhones. Who knows what my next phone may be!
     
  7. barkomatic macrumors 68040

    Joined:
    Aug 8, 2008
    Location:
    Manhattan
    #7
    I'm sure when the iPhone 6 is released, along with all the hype that will accompany it, that you'll forget about this terrible problem. :p
     
  8. mojolicious macrumors 68000

    mojolicious

    Joined:
    Mar 18, 2014
    Location:
    Sarf London
    #8
    I'm in the UK and this use of 'subsidy' genuinely confuses me.

    Surely if you're paying a reduced upfront price for a phone, then the difference between the price you paid and the full retail price is more than recouped by the operator over the course of a contract?

    For example, if you're getting a $400 'subsidy' on the initial price of the handset then your contract will cost you $20 a month more over two years, so you're ultimately paying $80 for 'financing'?

    If the above is correct, 'subsidy' just seems such a strange choice of words.
     
  9. Wide opeN macrumors 6502

    Wide opeN

    Joined:
    Aug 27, 2010
    #9
    Ummm, and the benefits arrrrrre!?!?!?!

    ----------

    Chances are it's a add on line that cost him $10.00 per month. Thus $240.00 every two years. You'd be crazy not to take the subsidy, because $650 > $240.00+$199.99.

    Therefore it makes SENSE to keep using the subsidy until it can't be used anymore!!!
     
  10. QCassidy352 macrumors G3

    QCassidy352

    Joined:
    Mar 20, 2003
    Location:
    Bay Area
    #10
    Yes. US carriers have long used the subsidy model in exactly the way you describe. It's not really good for consumers, but many like the cheap up-front price ($200 for a top end phone). The real killer is that the per-month cost does not come down when the subsidy is paid off OR when the contract expires. So users are put in exactly the situation described here - no real desire to upgrade, but doing so is the only way to get any value back because you'll pay the same high monthly rate either way.

    Fortunately, US carriers are moving away from this model. My carrier (att) now charges $25 less per line if the phone did not receive a subsidy and also offers no-cost financing to spread the cost of a device out -- but the price does come back down when the device is paid off.
     
  11. T5BRICK macrumors 604

    T5BRICK

    Joined:
    Aug 3, 2006
    Location:
    Oregon
    #11
    Cheaper monthly bill, potentially less money out of pocket overall depending on how many lines you have and how your plan is currently setup.

    ----------

    The problem with the model in the US is that extra amount built into the monthly bill(a bit less than $20 per month) does not go away after you've completed your 2 year contract.

    If you choose not to upgrade your phone, you basically pay extra for nothing.
     
  12. mojolicious macrumors 68000

    mojolicious

    Joined:
    Mar 18, 2014
    Location:
    Sarf London
    #12
    Ah, right. In you UK you can buy a £500 handset outright and then buy 'bundle x' at £15 a month it'll cost you £860 over two years. The same handset provided 'free' and same 'bundle x' would almost certainly cost you £1000 over a two year contract.

    Who actually pays for the subsidies in the US? Obviously a network operator isn't paying retail price for the handset, but is it also the case that SIM-only costs are artificially inflated to offset the cost of subsidised handsets?

    ****

    EDIT: ah, further posts. I'm struggling to get my head around this. The 'after two years you're FREE' (to either greatly reduce your costs, or give the old phone to a random relative and enter into a new two year contract with the latest/greatest handset) model is very ingrained here. Under the US model, at what point does the phone actually belong to you?
     
  13. aristobrat macrumors G4

    Joined:
    Oct 14, 2005
    #13
    After two years on the US subsidized model, your contract is over, and the phone is yours. You can then cancel your service and not incur any "early termination fee". Also at that point, most carriers will unlock your phone. However, the price of your monthly bill does not reduce, even though you've paid the phone off.

    T-Mobile started something last year, which AT&T and Verizon are matching, where they are offering plans where the cost of the phone is separate from the cost of the service. These plans are relatively new, and based on posts on MacRumors, there's still a lot of confusion about how they work. But with these plans, until you have paid back the MSRP of the phone, your monthly bill includes an amount for the financed phone (0% APR), plus an amount for the service. Once your phone is paid off, then your monthly bill is only for the service.

    In the US, SIM-only costs are the same as the MSRP. i.e. US$649 for the 16gb iPhone.
     
  14. T5BRICK macrumors 604

    T5BRICK

    Joined:
    Aug 3, 2006
    Location:
    Oregon
    #14
    The model is almost exactly the same, except in the US the monthly phone cost or "Subsidy" is built right into the cost of the wireless service.

    The carrier covers this cost, because for most situations it actually makes them money. A lot of people simply keep using their old phones and keep paying the same monthly wireless service cost, even after their 2 year contract is expired.

    As soon as your 2 year contract is up the phone belongs to you.
     
  15. wordoflife macrumors 604

    wordoflife

    Joined:
    Jul 6, 2009
    #15
    Not for me.
    My carrier will reduce my bill if I'm not under a contract.
     
  16. KUguardgrl13 macrumors 68020

    KUguardgrl13

    Joined:
    May 16, 2013
    Location:
    Kansas, USA
    #16
    My contract for my iPhone 5 is over in January 2015 when there will likely be an iPhone 6, but my family (outside of me) is one of many that doesn't get how the contracts and subsidies work. My mom still has an LG Env3 that she's had for probably four or five years now. She doesn't want a smartphone and doesn't get that my dad (the plan "owner") thrown WAY more money at that phone than it's worth. This is why I'm glad my BlackBerry Storm2 died just after my contract was up so my parents didn't keep paying for such a junky phone.

    So when January comes I may just have to save up and get my dad's permission to upgrade. If my 5 still works, I'll sell it or see of anyone in my family wants it.
     
  17. rui no onna macrumors 601

    rui no onna

    Joined:
    Oct 25, 2013
    #17
    Assuming he actually keeps an iPhone on that line, you're forgetting the enforced data plan so that's more like $25-40 per line, not just $10. That said, since the extra $450/2 years is built-in to the plan pricing, for me, it was a waste not to use our upgrades so I ended up upgrading whether or not I wanted the new iPhone so as not to waste the subsidy. I just switched our account to the new Mobile Share Value 10GB plan so this year, it's easy for me to skip the upgrade if there are no compelling features. :rolleyes:

    Mind, T-Mobile actually had BYOD Value plans prior to removing traditional phone subsidy altogether and introducing an installment plan. If I remember correctly, the cost for 4 lines with shared 1,000 minutes, unlimited text and unlimited data (2GB 4G speed) on each line is just $110.
     
  18. kmj2318 macrumors 68000

    kmj2318

    Joined:
    Aug 22, 2007
    Location:
    Naples, FL
    #18
    If you're on a contract, you're paying for they upgrade so you might as well take it, although iPhone users probably want to hold out for the 6. Maybe this is a good time to get a no-contract plan.
     
  19. Dontazemebro macrumors 68020

    Dontazemebro

    Joined:
    Jul 23, 2010
    Location:
    I dunno, somewhere in West Texas
    #19
    It's an American thing. People are so used to purchasing via credit/payment plans over here that they only really look at the upfront cost and not what it'll take to pay off the entire cost. Save now wing it later, is the Gold standard for quite a few.
     
  20. Jimmy James macrumors 68040

    Joined:
    Oct 26, 2008
  21. ET iPhone Home macrumors 68040

    ET iPhone Home

    Joined:
    Oct 5, 2011
    Location:
    Orange County, California USA
    #21
    Why not keep both? You can sway iPhones every other day.
     
  22. nostresshere macrumors 68030

    Joined:
    Dec 30, 2010
    #22
    Gotta have it

    Gotta have it


    When will it ever end.....
     

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