Apple Store No Longer Sells iPhone With 2-Year Contract on AT&T

[BuffaloTF]

I can't believe the amount of people fooled by the AT&T Next plan...

Let's do the math: AT&T says that the Samsung Galaxy S4 will have a monthly installment fee of $32, on top of your existing AT&T service fees, which already include a device subsidy. The exact amount of that subsidy is unknown, but most industry estimates have put it at something like $20 per month. That's how you can get a GS4 for $199 with a new two-year contract, even though it costs $620 at retail: after two years, AT&T will have collected $680 in total device payments from you, and you get to keep the phone.

But the balance tips entirely towards AT&T with Next. Assuming that same $20 subsidy, after 12 months of Next you will have paid AT&T $384 in Next monthly installments and $240 in device subsidies, for a grand total of $620. Again, that's exactly the full retail cost of an unlocked Galaxy S4 — but you don't get to keep that phone, even though you just paid full price for it. You have to trade it in to get a new phone — effectively giving AT&T a free GS4 to refurbish and resell to its next unwitting customer.

Now, you do get to keep your Next phone if you pay 20 monthly installments, which will cost you a whopping $1,040 if you assume a $20 subsidy: $640 in Next payments, plus $400 in subsidies built into your AT&T plan. That's $420 in pure profit for AT&T, which just made you pay full price for a phone while charging you inflated service prices that include a subsidy specifically designed to lower the upfront cost of that phone.

source: http://www.theverge.com/2013/7/16/4528404/att-next-phone-upgrade-plans-a-huge-ripoff

I can't believe the amount of people that quote a 2-year old, incredibly incorrect story, still.

Next lops off 25 dollars per month from the 40 dollar monthly access fee, so you only pay 15. You own the phone, you don't return it unless you upgrade *before* you pay it off. So saving $25 per month for 2 years amounts to a 600 dollar savings. And you only pay the monthly fee for as long as it takes, so a 750 dollar phone only ever costs you 750 dollars. No more, no less.

With a contract, you pay 200 dollars up front, and then you pay an extra 25 dollars per month forever, but for arguments sake, we'll use the exact same 24 months... So that 600 dollars saved on Next you now pay onto that phone, so your 750 dollar phone costs you 800 after 24 months... So after 24 months, you're already behind 50 bucks from where I am.

But then if we keep the phones, things get interesting... I stop paying my fee, yet you keep paying 25 dollars more per month. If we kept it another year, my 750 dollar phone has only cost me 750 dollars. Yours has now cost you 1100.

Maybe next time, don't plagiarize, check the date on the article... And read the comments where the author has been corrected.

 

[mdelvecchio]

I don't know why there is so much vitriol over the carriers when they make pennies in profit compared to what Apple makes.

Because the carriers refuse to accept the fact that they are dumb pipes, like utilities. They keep trying to justify absurd, ridiculous fees, lie, blocking tethering for the data you've already paid for.

 

[The Doctor11]

The $40 dollars a month they told you about, you were already paying. There's nothing extra about it, they likely calculated that as the subsidy price you're paying for your phone on contract in your monthly bill. It sounds like a salesmen did their job really well in making you think you were being charged extra for something everyone is charged for. Though Next does end up being a little bit cheaper than a 2 year contract if you aren't a grandfathered customer. You need to be a little more aware of their terminology and do some research.

Excuse my dumb ass... That's not how they explained it to me

 

[jelew1985]

One thing you all need to keep in mind is when you are trying to figure out the cost of your monthly plan, you need to understand the whole amount is not taxed. When you are setting up the next plan, you are paying for the sales taxes of the phone in the store. Since you are doing this, you will not be taxed for the monthly phone payments.

For an example:
Next Plan
$100 for 10GB
3 lines @ $15/month
3 iPhone 6+ 16GB @ $31.24 (Next 18)
$70+$45=$105
$105+Taxes and surcharges=~$164
~$164+93.72(3 next payments)=$257.72

Traditional 2 Year
$70 for 6GB
3 Lines at $40
$70+$120=$190
$190+Taxes and Surcharges=~$223

So, you are looking at about $30 difference for doing Next. You will see a much better savings when doing 10GB or higher.

For an example:
Next Plan
$70 for 6GB
3 lines @ $25/month
3 iPhone 6+ 16GB @ $31.24 (Next 18)
$70+$75=$140
$140+Taxes and surcharges=~$123
~$123+93.72(3 next payments)=$216.72

Traditional 2 Year
$70 for 6GB
3 Lines at $40
$70+$120=$190
$190+Taxes and Surcharges=~$223

So you would see a difference of about $7 a month.

It's all about choosing the right plan to get the best savings. I hope this helps everyone understand how this works.

Also, if you are grandfathered in an unlimited plan from ATT, you are more than welcome to keep that plan and still do next. ATT's activation systems (OPUS or POS depending on the store) will not force any rep to remove unlimited data. If they are telling you that you have to give it up, then they are not being honest and they are removing it themselves. This has to do with reps trying to earn the highest possible commission for plan changes. In our store, we don't get paid for changing plans or features as this is absolutely pointless and not in the best interest of the customer. We will change it if the customer is well informed and knows what they want to do, otherwise we leave the plans alone.

What makes me qualified to answer this? I have been selling all 3 carriers (sprint, verizon and att) for 3.5 years (no I do not work for Best Buy Mobile, they are just as bad as carrier stores). The company that I work for we value the customer's time and money. So we believe in to be completely honest and upfront with our customers, so they can make the best decision for them. What I did up above is what I do with every customer that wants to know the truth about Next plans. Unlike the carrier stores (corporate stores) they won't tell you everything upfront about what you are paying. They won't tell you about how the taxes or the true monthly cost. They will just tell you that you monthly bill will be the plan+phones and leave out taxes, discounts or anything that does matter.

 

[ProVideo]

I've been holding off on upgrading to iPhone 6, but it looks like I'll be switching to T-Mobile instead after 10-15 years of being on Cingular/AT&T.

 

[C DM]

Quick comparison for those with grandfathered unlimited iPhone accounts. Numbers are for family iPhones, lowest model current generation iPhone. The grandfathered upgrades require $40 upgrade fee, which I added though most of us can get those waived or partially waived.

Yellow is the breakeven plan for the grandfathered unlimited, taking advantage of the current 2-year subsidy. Green is the breakeven plan if AT&T entirely removes subsidized upgrades.

Mobile Share becomes better the longer you keep your iPhone.

As some of you can see, the grandfathered accounts are real cost savings. Why there are some in these forums that are greatly upset if 2-year contract upgrades are eliminated entirely.

Hopefully this helps to clearly show savings with grandfathered unlimited. And where you need to be to see any savings, seems like they are pushing more people into mobile share.

Well, they didn't get rid of them entirely since they are still available from AT&T.

The interesting thing is that Verizon hasn't allowed contract upgrades on older plans (like those with unlimited) data for a long time now, so for many people a concept like this isn't new at all--for AT&T, yes, but all those with Verizon have been like this for years now.

 

[C DM]

Edge or Next plans are for suckers/idiots. Lots of them around though.

So those that actually save some money with Edge or Next are suckers or idiots? That's some logic right there.

 

[Mike Proctor]

So those that actually save some money with Edge or Next are suckers or idiots? That's some logic right there.

I'm not saving money (or paying more) with next but I am getting an interest-free loan for 30 months. That has value to me and allows me to get the device I want without dropping a grand to walk out the door with it. And one for my wife too!

 

[igorsky]

Understood. But that unlimited data plan with the cost of a phone built into it is STILL a better value than a base plan today. So buy buying a full price phone while still paying that grandfathered built-in price every month is still a better plan than the new plans today.

You are exactly right.

 

[igorsky]

So here's the situation I and 50% of AT&T's subscribers are facing - we have 1 or more phones that are grandfathered unlimited. While the NEXT plan thankfully won't remove the unlimited plan, it also doesn't give us the $15-25 discount on ANY of our phone lines. So that's why in my example, NEXT ends up costing me $1200 more over 2 years than staying with the 2 year contract option.

I'm on an unlimited plan and agree with your sentiment wholeheartedly. However one silver lining is that by selling your old phone privately and applying those funds towards the purchase of a new full-priced phone, you end up paying fairly close to the price of a subsidized phone. This obviously works best if you upgrade every year as the resale price of a one year old model is always higher than that of a two year old model.

 

[JWarren01]

The new pricing plans for the iPhone drove me to buy a near new phone on eBay to avoid this hassle.
- sent from my LG G3. Yes, trying Android

 

[iLeoMarc]

Well, they didn't get rid of them entirely since they are still available from AT&T.

The interesting thing is that Verizon hasn't allowed contract upgrades on older plans (like those with unlimited) data for a long time now, so for many people a concept like this isn't new at all--for AT&T, yes, but all those with Verizon have been like this for years now.

Clearly this is a foreshadow of where AT&T wants to go. Though I clearly stated "if" AT&T were to eliminate the 2-year contract upgrades; in my original post.

Mostly written for those who keep trying to say Next was better value than grandfathered. I just wanted to show the true price or savings of dropping a grandfathered unlimited for Next.

 

[CowboyBebop]

It's amazing to me how so few people understand how the Next program works. Anyway, for those of you that still have unlimited data plans, even if you do the 2 year contract pricing through AT&T, you still get to keep your unlimited data plan. If you decide to do the Next, you STILL get to keep your unlimited data plan. For those that are on the mobile share value plans, it depends on whether the 2 year is cheaper than the Next.

The iPhone 6 16GB retails $650. If you're on the 10gb mobile share value plan (MSVP) or higher, you will lose the $25 line charge discount that you're currently receiving due to being out of contract or the fact that you were on a 2 year contract prior to 2/2/2014 for 24 months. $25 X 24 = $600 + $40 upgrade fee + $200 discounted pricing = $840 that you're going to pay over the course of 24 months. I think we can all agree that it doesn't make any sense to do the 2 year contract if this is your situation.

If you're on the 6gb MSVP or lower, you will lose the $15 line charge discount you're receiving due to being out of contract or under a 2 year contract prior to 3/9/2014 (The 1gb and 300MB MSVPs do not get this consideration, only if you're out of contract do you get the discount). $15 X 24 months = $360 + $40 upgrade fee + $200 discounted pricing = $600 that you will pay over the course of 24 months. In this scenario, it is a little bit cheaper to do the 2 year contract vs Next. The disadvantage is that you cannot trade your device in every 12 months and you have to pay $240 upfront. For this situation, it really comes down to if you want the option to trade-in and not have to pay the $240 upfront.

Now where it gets more complicated and not so easily determined for everyone is if you are in fact on an unlimited plan. If you're using a lot of data, then it probably will be cheaper for you to do the 2 year contract and stick with your plan. If you're not using a lot of cellular data, then in a lot of circumstances, it will probably be cheaper to switch to a MSVP and do the Next or even the 2 year contract (see above). If you don't know, I suggest you log on to att.com and go through the initial process of changing your plan. It will show you a comparison chart of what you have and are currently paying as well as how much data all of your lines have used over the last 3 months. Admittedly, 3 months is probably not an ideal amount of time to check, but it gives you an idea. That chart will tell you pretty quick whether it's worth considering.

Here's the reality with all of this: whether you like it or not, ALL of the carriers will eventually get rid of 2 year contracts. This is the next big step that AT&T is taking and as some others have stated, I am sure Verizon will follow suit very soon, if not Sprint as well. 2 year contracts still exist for the time being, it's just not going to be around indefinitely.

So a lot of you can moan and groan about all of this, it's not going to change what is happening regardless of which provider is yours. What I am hoping is that when everyone is finally aware of what these devices actually cost, the manufacturers will ultimately have to lower the cost on them.

 

[cardfan]

So those that actually save some money with Edge or Next are suckers or idiots? That's some logic right there.

You can do better. The key is understanding that there's more than just phone lines on a plan and you can change them (at least on Verizon you can). There's tablet lines at 10 a month. When buying a new iphone, always add a line and buy it subsidized. Then convert it to a tablet line which is simple to do online. Keep using old iphone line that's out of contract @15 a month. Your ipad lines are the ones on contract @10 a month.

Always call and get any activation fees waived. You can upgrade each year for free basically by selling old iphone and still pay the same monthly. I pay 180 a month for 30gb. This is for 2 iphone lines and 4 ipad lines. Rinse, repeat. Add two lines, cancel two expiring lines.

 

[Dmunjal]

Because the carriers refuse to accept the fact that they are dumb pipes, like utilities. They keep trying to justify absurd, ridiculous fees, lie, blocking tethering for the data you've already paid for.

It seems that's what they are doing now. Uncoupling the hardware from the service. With the BYO plans, you get unlimited voice, text, and tethering and you only pay for the data. Plus, you get rollover month to month.

Isn't that what you want?

 

[C DM]

You can do better. The key is understanding that there's more than just phone lines on a plan and you can change them (at least on Verizon you can). There's tablet lines at 10 a month. When buying a new iphone, always add a line and buy it subsidized. Then convert it to a tablet line which is simple to do online. Keep using old iphone line that's out of contract @15 a month. Your ipad lines are the ones on contract @10 a month.

Always call and get any activation fees waived. You can upgrade each year for free basically by selling old iphone and still pay the same monthly. I pay 180 a month for 30gb. This is for 2 iphone lines and 4 ipad lines. Rinse, repeat. Add two lines, cancel two expiring lines.

And sometimes Edge or Next still works out better without any of that.

 

[cardfan]

And sometimes Edge or Next still works out better without any of that.

You'd have to run the numbers and upgrade iphones every 12 months. I haven't seen where edge or next saves money.

 

[Mike Proctor]

It seems every plan from all the carriers that have unlimited call and text works out to around $50 per month per line. Some a little more some a little less. The part that you have to think about is how much data and what device... I think carriers dropping the subsidies and contracts will hopefully make it easier to figure out what the hell we're paying for. I'm glad I only have to worry about 2 lines, I can't imagine trying to find the best deal on 5 or 10 lines.

 

[C DM]

You'd have to run the numbers and upgrade iphones every 12 months. I haven't seen where edge or next saves money.

I did for my plan and my lines and it worked out better for me than other options.

 

[fieldsphotos]

As a Verizon customer we had to go through this pain two years ago when they forced unlimited data plans to buy phones outright to upgrade (not taking into account the various back doors folks still use). I am not surprised ATT is going this direction, I am just surprised it took this long.

Bonus about this trend: I had been holding onto my unlimited VZW with a death grip by paying out of pocket for our phones since the changeover. When these plans first came out, they weren't that great and I would have been paying the same amount of $$ per month to get 4GB of data, which seemed like a bad deal - so I stopped looking into it. Now, I see the pricing has come down and I can buy a 10GB BYOD plan (10GB is effectively unlimited for my usage) for $65 LESS/month than I am paying for my service now (I currently pay extra for hotspot). That is enough savings to make me finally give up my unlimited data plan.

I am glad this trend is happening. It is nice to decouple phones from the service. When we first joined the ranks of pay outright phone users it was a PITA to figure out which model iPhone was the least locked. And you were always being screwed by your plan which wasn't discounted. I want to buy a phone, THEN pick my carrier. If I decide I don't like the service after 6 months, I want to just be able to cancel and try someone else and not buy new hardware.

 

[suerte66]

It's amazing to me how so few people understand how the Next program works. Full disclosure: I do work for AT&T. Anyway, for those of you that still have unlimited data plans, even if you do the 2 year contract pricing through AT&T, you still get to keep your unlimited data plan. If you decide to do the Next, you STILL get to keep your unlimited data plan. For those that are on the mobile share value plans, it depends on whether the 2 year is cheaper than the Next.

The iPhone 6 16GB retails $650. If you're on the 10gb mobile share value plan (MSVP) or higher, you will lose the $25 line charge discount that you're currently receiving due to being out of contract or the fact that you were on a 2 year contract prior to 2/2/2014 for 24 months. $25 X 24 = $600 + $40 upgrade fee + $200 discounted pricing = $840 that you're going to pay over the course of 24 months. I think we can all agree that it doesn't make any sense to do the 2 year contract if this is your situation.

If you're on the 6gb MSVP or lower, you will lose the $15 line charge discount you're receiving due to being out of contract or under a 2 year contract prior to 3/9/2014 (The 1gb and 300MB MSVPs do not get this consideration, only if you're out of contract do you get the discount). $15 X 24 months = $360 + $40 upgrade fee + $200 discounted pricing = $600 that you will pay over the course of 24 months. In this scenario, it is a little bit cheaper to do the 2 year contract vs Next. The disadvantage is that you cannot trade your device in every 12 months and you have to pay $240 upfront. For this situation, it really comes down to if you want the option to trade-in and not have to pay the $240 upfront.

Now where it gets more complicated and not so easily determined for everyone is if you are in fact on an unlimited plan. If you're using a lot of data, then it probably will be cheaper for you to do the 2 year contract and stick with your plan. If you're not using a lot of cellular data, then in a lot of circumstances, it will probably be cheaper to switch to a MSVP and do the Next or even the 2 year contract (see above). If you don't know, I suggest you log on to our myatt app or att.com and go through the initial process of changing your plan. It will show you a comparison chart of what you have and are currently paying as well as how much data all of your lines have used over the last 3 months. Admittedly, 3 months is probably not an ideal amount of time to check, but it gives you an idea. That chart will tell you pretty quick whether it's worth considering.

Here's the reality with all of this: whether you like it or not, ALL of the carriers will eventually get rid of 2 year contracts. This is the next big step that AT&T is taking and as some others have stated, I am sure Verizon will follow suit very soon, if not Sprint as well. 2 year contracts still exist for the time being, it's just not going to be around indefinitely. Keep in mind, I don't have any insider information about this reality. This is public knowledge and anyone following the cellphone industry has seen the writing on the wall for sometime.

So a lot of you can moan and groan about all of this, it's not going to change what is happening regardless of which provider is yours. What I am hoping is that when everyone is finally aware of what these devices actually cost, the manufacturers will ultimately have to lower the cost on them.

I have an unlimited 2 year contract that I can upgrade soon, my question is, if I don't upgrade, will my bill go down? I don't think so, but I'd really like to buy an unsubsidized phone, keep my unlimited data and somehow have a cheaper monthly bill

 

[C DM]

I have an unlimited 2 year contract that I can upgrade soon, my question is, if I don't upgrade, will my bill go down? I don't think so, but I'd really like to buy an unsubsidized phone, keep my unlimited data and somehow have a cheaper monthly bill

The older plans don't get the discount to offset the subsidy once there is no longer a contract involved. Only the newer/current plans do.

 

[suerte66]

The older plans don't get the discount to offset the subsidy once there is no longer a contract involved. Only the newer/current plans do.

Yeah thats sorta what I thought, so then it really is cheaper for me to just get the discounted phone with renewing the contract, shame

 

[AZhappyjack]

I have an unlimited 2 year contract that I can upgrade soon, my question is, if I don't upgrade, will my bill go down? I don't think so, but I'd really like to buy an unsubsidized phone, keep my unlimited data and somehow have a cheaper monthly bill

Not renewing/purchasing a new phone will have no effect on your bill with a 2-year contract plan - that is, it does NOT "go down" because you don't re-up and get a new phone. But to get the $199 iPhone, you will need to get the 2-year commitment price directly from AT&T (no more Apple or Best Buy deals). Other options for a new phone are: buy a phone outright or get it on the Next plan. Buying outright will cost you $649 for the cheapest iPhone model. Buying on Next will bump your AT&T bill up by between $21 and $35, depending on your purchase plan (20, 24 or 30 payments). Either way, you effectively get screwed over because your monthly contract for service already includes $XXX to allow AT&T to recoup the cost of subsidy (which you are not using).

The new MobileShare plans give you a bit of a break, in that, you buy a "bucket of data" to share for a fixed price and add a "per line" fee for each line on the plan. The cost of that "per line" fee is $40 IF you are on a subsidized contract currently. Once you are out of contract, the "per line" is only $15. Effectively, for that same contracted $40, you cover the $15 "per line" fee AND cover most/all of the cost of the Next payment.

I bit the bullet yesterday and converted my 5 line Family Share plan to a Mobile Share plan with Next. It will initially save me about $80/month. But when the new iPhones come out, 3 of the lines will get them, effectively wiping out the $80 savings - potentially costing me about $20 more each month.

I don't like it, but you can't take it with you.

 

[D.T.]

I stop paying my fee, yet you keep paying 25 dollars more per month. If we kept it another year, my 750 dollar phone has only cost me 750 dollars. Yours has now cost you 1100.

With Verizon (current carrier) - and I thought it was also the case with AT&T (previous carrier) - once you hit the 24 month duration of the contract, you can keep your "subsidized" phone and drop the access fee down to $15 just like you supplied your own device. We're doing that now with our older-than-24-month iPhones that were originally subsidized (no contract, lower access fee).

Again, my direct experience is with Verizon, but I _thought_ AT&T had the same policy (even though we never used it and were in a continuous upgrade cycle).