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AT&T Rolls Out New 'AT&T Next' Smartphone and Tablet Upgrade Program
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They have an unlimited text and data plan with 100 minutes for $30/month.
"100 minutes talk | Unlimited text | First 5GB at up to 4G speeds"
When you purchase a subsidized phone on contract, the carrier is paying for part of your phone and incorporates those costs into your monthly payment plan. I used a 2yr contract, but it looks like you are only doing a 1yr contract based on your figures. So here is the example using the iPhone 5:
Retail (unsubsidized) price = $650
1yr Contract Price = $450
Therefore, the carrier is paying for $200 of your phone's price. This equates to $16.67 per month over the 12 months of your contract. With the new plan, your monthly rates are not changing, but you are paying the $32.50 additional for the phone on this new plan (650/20). So in reality, assuming you upgrade every 12 months, you are paying $49.17 per month for your phone over the 12 months (or $590.04 per year) and you don't even get to keep it if you do upgrade.
So, for you, the choice is:
1yr contract: $450 - Selling the phone after the year (~300) + $36 (upgrade fee) = $186 device cost to you
Next Plan: $32.75 *12 months = $393 device cost to you
Note: I left the monthly plan charges out as they are the same on both plans.
GL
EXACTLY!
The only benefit here is for ppl who can't come up with the cash upfront and will pay over time. Basically AT&T says, "You can pay me now, or you can pay me later, but one way or the other, you're gonna PAY ME!" Only in this case, you pay even more!
I hope most consumers understand this.
Yup. Let's look at a two year example.
Start a two year contract buying an iPhone at $199
After a year, sell that phone for $250 (conservative estimate) and buy a new one at retail at $649.
Total out of pocket for two years = $598
New Plan: Buy an iPhone and over 1 year make $390 in payments. Trade it in for a new phone and make another $390 in payments over that year.
Two year cost= $780
For android phones it might be more attractive due to lower resale, but it is still real expensive.
The best deal is still getting a phone at the two year contract price and keeping it for two years. Keeping your phone for the two years saves you about $400 minimum.
Without simultaneously rolling back the monthly service fees, this is a complete and utter sham!
But this new plan WILL make "sense" to good number of people. Reason: They won't have to put up the $199 at the start (16GB iPhone). They'll just see the $0.00 down and for a LOT of people, that is very appealing.
This new plan will appeal to the very same people that go to those Pay Day Loan stores to get a short-term loan at 99% interest! There are a LOT of people that keep those places in business.
Mark
But this new plan WILL make "sense" to good number of people. Reason: They won't have to put up the $199 at the start (16GB iPhone). They'll just see the $0.00 down and for a LOT of people, that is very appealing.
This new plan will appeal to the very same people that go to those Pay Day Loan stores to get a short-term loan at 99% interest! There are a LOT of people that keep those places in business.
Mark
Until they see the monthly bill. The cheapest I could get ATT for 2 lines is around $150, I can't imagine paying over $200 a month just to have the latest mobile tech. I'm rockin a 4S and it's plenty fast for my needs, once phones went dual core I stopped bothering with upgrade envy.
The free market at work. Finally!
Indeed. But in the next few months AT&T will lock in a substantial number of financial illiterates. Only once it becomes common knowledge that this is a bad deal, they'll lower their prices - but the early adopters will be locked in. Can't blame AT&T: Like taking candy from a baby.
Personally I think AT&T are petrified that the forthcoming cheap iPhone will be bought outright by a number of their customers. Those customers will then defect to T-mobile and avoid being billed for equipment they already own.
Two things - one, disappointment in all the hoopla about a big announcement only to find it's a scheme to double-charge you for a phone. Two, realization that AT&T will pitch it as a great deal and many stupid people will probably fall for it.
One more choice isn't always a good thing. Would you like a punch in the nose, or a punch in the nose plus a kick in the groin?
It will be interesting to see in the T&C what happens if you damage the phone before you make all the payments. Will you be required to pay the balance off right away? If you go out and find a new phone, will you just continue making payments on the damaged one? If I get an AppleCare replacement will I still be able to trade it in even if is a different S/N? Just something else to think about that could get a lot of people in trouble.
you can sell the old iphone yourself to make it cheaper than $449. with ATT you are paying them $360 more for the year plus they take your old phone to resell to someone else
Don't forget AT&T is also not buying an iPhone at $600 retail. The cost is probably $500 at max.
Check my math on this, but here is a comparison I came up with from the current subsidy plan (requires 24 months before upgrade discount) and the Next plan for those who will upgrade after 12 months from one phone to the next. I used 16GB iPhone 5 and assumed iPhone 5S prices of $199 for full discount and $650 for outright purchase. I know not everyone goes out and pays full price immediately for the new phone, but to compare the new plan, this is one way to look at it.. With the new plan, you can upgrade to the new phone right away.. and to do so you will actually pay less.. see picture:
Now this doesn't account for the fact that you can resell your original phone to offset the cost of the new one. No guarantee of pricing on resale phones (and this plan may even drive used prices down) but if you figure getting $300 for a used iPhone 5 16GB after 12 months, you will save money with the subsidy plan.
Now this doesn't account for the fact that you can resell your original phone to offset the cost of the new one. No guarantee of pricing on resale phones (and this plan may even drive used prices down) but if you figure getting $300 for a used iPhone 5 16GB after 12 months, you will save money with the subsidy plan.
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Haha holy ****. They put the prices up for the latest smartphones (like lumina 1020) that are $300 at purchase. Off contract the price is like $10 more than an iPhone 5. You literally pay the same subsidy rate but start off hosed at $100 more for every 24 months. Going to be funny if they start this pricing on the iPhones too to make Next "attractive".
Well **** you too AT&T. Time to switch to T-Mobile.
Well **** you too AT&T. Time to switch to T-Mobile.
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I read somewhere that they actually do have to pay full price. Same for all the other carriers.
They might since I think AT&T and Verizon are over extended on their iPhone purchase commitments.
Really comes down too that it does offer a way for people that cant afford to buy a phone upfront. Then it either becomes like a rent to own type of thing if want a new phone every year or if can wait pay it off by the 20 months.
T moblie seems great cause they dont have the traffic of ATT ot Verizon. But dont think that they are immune to peak traffic and slow times once more people join the network.
Alot of people will gladly pay the loss of 15 - 20 a month( just guessing) of not worrying about selling the phone and having the newest phone every year. Some deals may not make financial sense but do make time and convienence sense.
We all have different views of what is money sense. Some think spending 50 a month on starbucks worth it, but will look at this deal and say its a rip off. It really falls in the eye of the beholder of what is value to you, and just because people have different values system doesnt make yours or mine better. Just different and what works for you in your way of life.
T moblie seems great cause they dont have the traffic of ATT ot Verizon. But dont think that they are immune to peak traffic and slow times once more people join the network.
Alot of people will gladly pay the loss of 15 - 20 a month( just guessing) of not worrying about selling the phone and having the newest phone every year. Some deals may not make financial sense but do make time and convienence sense.
We all have different views of what is money sense. Some think spending 50 a month on starbucks worth it, but will look at this deal and say its a rip off. It really falls in the eye of the beholder of what is value to you, and just because people have different values system doesnt make yours or mine better. Just different and what works for you in your way of life.
All true, except that most of those other carriers suck and are useless for a lot of people.
Credit Cards Cheaper?
It might be cheaper for people to buy the iPhone outright on a credit card and make payments that way than to sign up for this plan.
Examples:
If a person were to buy an iPhone at retail at $650.00 with a credit card at 23% APR and the person paid the phone in equal installments over 12 months, the phone would cost that person $61.15 per month for a total cost of $733.80. If the person sold the phone for $300.00, the total cost of the phone would be $433.80. Divided over the 12 months of ownership, that person would pay $36.15 per month net.
If the person paid for the same iPhone in equal installments over 18 months at the same APR, the phone would cost the person $43.04 per month for a total cost of $774.72. If the person sold the phone for $250.00, the total cost of the phone would be $524.72. Divided over the 18 months of ownership, that person would pay $29.15 per month net.
A few thoughts here:
1) AT&T is making a lot of interest (20%+) on the desire of people to lease their phone just to upgrade every 12 months. Over a 12 month period, AT&T may charge less interest than a credit card but the person never owns the phone and is locked into AT&Ts service contract and fees. To break the service agreement is not really an option, since the person might as well just buy the phone outright instead.
2) If a person could exercise a minor amount of restraint (upgrading every 18 months instead of every 12 months), even people who can't afford to pay the upfront cost of an iPhone at MSRP in full could afford to purchase an iPhone with a credit card while making only marginally higher payments than those charged by AT&T and they would still be money ahead.
3) Few people consider what would happen if they were unable to continue to pay on their service contract. The freedom of owning a phone and being able to terminate service with a provider (if necessary) without financial repercussions removes a great amount of anxiety and stress that many people will never experience. I say this based on my experience of dealing with my daughter's sudden but chronic illness over a five year period. Fortunately, she is doing well and in remission now, but few people plan on major medical emergencies. (I didn't.)
It might be cheaper for people to buy the iPhone outright on a credit card and make payments that way than to sign up for this plan.
Examples:
If a person were to buy an iPhone at retail at $650.00 with a credit card at 23% APR and the person paid the phone in equal installments over 12 months, the phone would cost that person $61.15 per month for a total cost of $733.80. If the person sold the phone for $300.00, the total cost of the phone would be $433.80. Divided over the 12 months of ownership, that person would pay $36.15 per month net.
If the person paid for the same iPhone in equal installments over 18 months at the same APR, the phone would cost the person $43.04 per month for a total cost of $774.72. If the person sold the phone for $250.00, the total cost of the phone would be $524.72. Divided over the 18 months of ownership, that person would pay $29.15 per month net.
A few thoughts here:
1) AT&T is making a lot of interest (20%+) on the desire of people to lease their phone just to upgrade every 12 months. Over a 12 month period, AT&T may charge less interest than a credit card but the person never owns the phone and is locked into AT&Ts service contract and fees. To break the service agreement is not really an option, since the person might as well just buy the phone outright instead.
2) If a person could exercise a minor amount of restraint (upgrading every 18 months instead of every 12 months), even people who can't afford to pay the upfront cost of an iPhone at MSRP in full could afford to purchase an iPhone with a credit card while making only marginally higher payments than those charged by AT&T and they would still be money ahead.
3) Few people consider what would happen if they were unable to continue to pay on their service contract. The freedom of owning a phone and being able to terminate service with a provider (if necessary) without financial repercussions removes a great amount of anxiety and stress that many people will never experience. I say this based on my experience of dealing with my daughter's sudden but chronic illness over a five year period. Fortunately, she is doing well and in remission now, but few people plan on major medical emergencies. (I didn't.)
While I don't like all the trickery, I will say that they are probably feeling pressure from Apple because they're committed to purchasing billions of dollars worth of devices. The irony is our devices are still viable for a much longer period. I'm still using my 4 which I bought the day it came out three years ago. While a new device would be nice, I am more than satisfied with the savings (especially since I unlocked and switched to the T-Mobile $30 prepaid plan last September).
I think they get a volume discount but they have to commit to buying a certain $ amount of the devices where verizon is like $12 billion behind or something crazy.
I emailed AT&T asking about this and they called me back. She confirmed that the subsidy hidden in your rates does NOT go away when you do AT&T Next. So there really is no reason for doing this program.