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

[C DM]

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).

If you are on one of the current plans, that works, but older grandfathered plans don't allow for that type of a discount.

 

[D.T.]

If you are on one of the current plans, that works, but older grandfathered plans don't allow for that type of a discount.

Ahh, thanks for the clarification! Funny enough, it wasn't like it was automated on Verizon, it required a little account gyration to activate the discount. I'm sure they'd be happy to keep charging the full access fee

 

[CowboyBebop]

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

Yeah, that's not going to happen. I worked it out a number of years ago and I'm not going to try to figure it out again. Bottom line, if you're on an unlimited plan, you're over paying if you DON'T do an upgrade every two years with the 2 year contract. This is because of the cost of the device being built into the cost of the service and not getting a discount when you're out of contract. So basically, there's really no point in paying full price.

It's been my experience that AT&T is VERY reluctant to force anyone off any sort of plan. Although, who knows what may happen in the next year.

My guess, and once again, only a guess, is that by next year, there will probably not offer 2 year contracts at all. I think right now AT&T is testing all of their systems and situations to see how this goes over the next 6 months. But we all may as well get used to it. I say we, because yes, I still do 2 year contracts and am also on an unlimited data plan.

And those belly aching that AT&T is trying to screw you or what not, once again, get over it. Because pretty soon no one is going to be able to buy a smartphone with a discounted price.

 

[Zetaprime]

Well that it just means you won't be able to buy the phone at the Apple Store with a contract. But you should still be able purchase a phone through the ATT store on contract.

It says "online store". So if you go to the actual bricks and mortar Apple store it should still be as it was before.

 

[Pman17]

Pretty much all of these phone companies are resorting to leasing phones. Sprint does this with their phones. Cut your contract in half and they pay off your phone for switching, but you have to give back your phone in mint condition after two years. So, I see AT&T is doing that with NEXT. Pay nothing straight up, but pay the same monthly for 2 years but you have to give it back if you want a new phone or keep paying of your old. There's no ownership.

But then look, you could think of it as AT&T is buying back your phone and you don't have to put in the effort to sell your phone on ebay. You don't get any money, but you don't have to pay $300 straight up when you get your new phone. Who keeps their phone after two years?
Pretty smart for AT&T, since I bet most people sell their phones and use that money to buy the initial payment for the new one.

Though for my family, the ones that aren't very responsible with phones get the hand me downs and the responsible ones get the new upgrades. So... that's not gonna work for me. Best to just buy the phone in full.

 

[Mike Proctor]

Pretty much all of these phone companies are resorting to leasing phones.

The AT&T next plan is NOT a lease. You own the phone when you're done with the payments. I think Sprint offers a lease plan but I don't know the details.

 

[Dmunjal]

Pretty much all of these phone companies are resorting to leasing phones. Sprint does this with their phones. Cut your contract in half and they pay off your phone for switching, but you have to give back your phone in mint condition after two years. So, I see AT&T is doing that with NEXT. Pay nothing straight up, but pay the same monthly for 2 years but you have to give it back if you want a new phone or keep paying of your old. There's no ownership.

But then look, you could think of it as AT&T is buying back your phone and you don't have to put in the effort to sell your phone on ebay. You don't get any money, but you don't have to pay $300 straight up when you get your new phone. Who keeps their phone after two years?
Pretty smart for AT&T, since I bet most people sell their phones and use that money to buy the initial payment for the new one.

Though for my family, the ones that aren't very responsible with phones get the hand me downs and the responsible ones get the new upgrades. So... that's not gonna work for me. Best to just buy the phone in full.

I don't know how many times this needs to be said. NEXT is NOT a leasing program. It is a 0% financing program. You keep the phone after you complete the payments.

Please stop propagating misleading information.

 

[mtneer]

Most people are idiots and don't think they're actually paying full price for the phone on the 2-year contract, that they're only paying $199 for it. On the Next program, it specifically spells out that you're paying for the phone over two years.

See the difference, AT&T is being transparent about it on the Next plan and people are freaking out.

That's the level of trust AT&T has with the public. Their "transparency" efforts are as believable as the guy driving a 1970s van with no windows and Free Candy scrawled on it.

 

[mtneer]

Even if you're on unlimited (which I used to be), you're better off just buying phones on Craigslist or swappa.com and just upgrading at your leisure by swapping SIMs. Don't mess with AT&T at all.

So you will still have to come up with the cost of the hardware out of pocket yourself, while still paying AT&T's UDP plan which would have rolled in the phone on a 2-year subsidy. In essence AT&T will charge the same price as UDP plan, except they get out of paying part of your phones cost through their monthly UDP fee.

 

[Dmunjal]

So you will still have to come up with the cost of the hardware out of pocket yourself, while still paying AT&T's UDP plan which would have rolled in the phone on a 2-year subsidy. In essence AT&T will charge the same price as UDP plan, except they get out of paying part of your phones cost through their monthly UDP fee.

True. That's why the unlimited plans aren't that great anymore. Unless you're using a lot (40GB+) of data.

 

[abowlby]

But with Next you have to trade in your phone at the end. Or make another six installment payments if you want to keep it.

So...it's almost like, if you want something, you have to pay for it completely. Like, a lease with a buy option.

 

[Zetaprime]

Did no one else notice that the option was removed only from the Apple online store? That says nothing about your ability to buy the phone with a contract if you walk into your local Apple Store.

 

[C DM]

So...it's almost like, if you want something, you have to pay for it completely. Like, a lease with a buy option.

You just pay off the loan you have that is used to purchase it (i.e. financing).

 

[Gooberton]

So much FUD.

1. AT&T is not pushing anyone out of a legacy plan.
2. Apple makes and prices the iPhone. Yet, people are mad at the carriers because of the cost of the iPhone. What!? Literally, why?

Do you want to know the price difference between a subsidized legacy plan and the new plans without the cost of the phone? The cost of the phone. Do you REALLY think anyone was giving you an iPhone for $200?

It pains me to see people so adverse to logical analysis of a given scenario, because truth be told, the price of equipment has gotten cheaper for OEMs yet more costly in the market for consumers. For some reason people feel that their carriers should foot that bill while simultaneously lowering the cost of service. Do you get mad at the gas station because of how much your car costs? Hell, does the gas station give you a 0% APR loan for your car with $0 down at signing? LOL!

Putting pressure on OEMs to lower device costs is the potential outcome of all of this, yet everyone turns their sword against the service providers because they are giving the consumer more options and making transparent just how much money your giving to Apple, Samsung, LG, HTC, etc each month in the form of a premium on your wireless bill. Why aren't the masses questioning the OEMs about the cost/value paradigm? Huh?

Just make it make sense.

You are confused and illogical in your thinking, you have no grasp on why people are mad. No one here thinks anything you are suggesting. Get a grip on reality. Your arguing with yourself. No one minds paying and no one thinks they were getting a "200 dollar phone" they just want options and are concerned about the unlimited data to name a few issues any more explanation will confuse you further

 

[two.bits.11]

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.

You stole the words out of my mouth. Thank you!

 

[two.bits.11]

There is one problem that people can encounter with the Next plans when trading in early versus keeping the phone full term. People trading in early may be unknowingly giving up money.

That $750 phone over 24 months costs $31.25/mo. If they trade it in, AT&T is essentially giving you $187.50 for the phone 6 months early. They are most likely able to sell it for more after the full term. How much more is not clear. Although, they are getting the benefit of getting a new phone early. That has value to some people.

People under a two year contract do not have this option, and are paying more money over the 24 months.

 

[AZhappyjack]

There is one problem that people can encounter with the Next plans. The people that may be unknowingly giving up money are those who trade in there phones early. That $750 phone over 24 months costs $31.25/mo. If they trade it in, AT&T is essentially giving you $187.50 for the phone 6 months early. They are most likely able to sell it for more after the full term. How much more is not clear. Although, they are getting the benefit of getting a new phone early. That has value to some people.

People under a two year contract do not have this option, and are paying more money over the 24 months.

Remember, if you are on a 2 year plan, and you don't get a new phone every 2 years, you are actually losing money. The cost of the phone subsidy in built into the cost of the 2 year contract plan. That charge never changes. So you will pay the same rate for your plan/service/subsidized phone whether you are actually using the subsidy or not.

 

[two.bits.11]

Remember, if you are on a 2 year plan, and you don't get a new phone every 2 years, you are actually losing money. The cost of the phone subsidy in built into the cost of the 2 year contract plan. That charge never changes. So you will pay the same rate for your plan/service/subsidized phone whether you are actually using the subsidy or not.

You are correct. I was describing problems that people can encounter with the Next plans when trading in early versus keeping the phone full term. I have updated my post to make it more clear.

 

[iBighouse]

Wow, that sucks. That's how I've always purchased my iPhones.

No way in hell I'm giving up my grandfathered unlimited data plan.

Yeah, same situation here.

 

[^^BIGMac]

if you want something, you have to pay for it completely.

Kinda how the economy works, no?

 

[Dayv]

20 pages of comments, and some people still think Next is a leasing program.

 

[abowlby]

Kinda how the economy works, no?

Yes. I was being facetious. I'm all for Next as I understand it is fair pricing and NOT a lease.

 

[s8film40]

20 pages of comments, and some people still think Next is a leasing program.

If I want to upgrade every year and keep my old phones how does it work with the next plan?

 

[Dmunjal]

If I want to upgrade every year and keep my old phones how does it work with the next plan?

You turn in your phone because you don't fully own it and start a new NEXT program with the new phone. However, as many have stated, that is not a good idea. It's better to pay off the balance and sell it yourself for more.

 

[dampfnudel]

Unfortunately, all the others are just following Apple's lead. The one thing they all have in common is the carrier subsidy which is now going away. Without the subsidy, I'm not sure Apple can command the margins it does on the iPhone. Their other iOS devices don't have those margins because they don't get the subsidy.

With all the confusion on this thread about subsidized pricing, it may actually make buyers think twice before spending close to a grand on a phone. Hopefully, that puts some realistic pricing into the iPhone.

As someone who paid about $900 (with tax) for an iPhone last year, I sure hope you're right. If Verizon drops 2-year contracts as well, I wonder how Apple will present the prices at the next iPhone introduction because I don't think listing $649, $749 and $849 will look that great. Maybe $349 (16GB), $449 (32GB), $549 (64GB) and $649 (128GB) will look better.