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Comparing the New Frequent Device Upgrade Programs from U.S. Carriers
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I'm on Verizon and have no interest in moving to T-Mobile or AT&T. My focus is on how to save money on Verizon. The cheapest way to get a new phone every year is to buy on contract, pay the ETF in 12 months, and then sell the phone. The problem with this is there is no way to keep the old phone number. Verizon won't let you move an old number to a new line of service. You can move numbers between phones, but you are really swapping lines of service between phones when you do that. The number is tied to the original contract. I was told the only way to keep the old number with a new line is to port it out, wait for the next billing cycle to begin, and then port it back in.
The cost of Edge is about the same as buying off contract. This depends on the resale value of the phone, of course. With either, you get to keep your phone number. With cheaper or less popular Android and Windows smartphones, it might be safer to use Edge since you won't have to worry about the resale value.
To break down the options on Verizon for the cheapest iPhone 5, assuming you keep it for 1 year and assuming that in 1 year the iPhone 5 will be worth $300.
with Contract = $129 ($199 phone + 230 ETF - 300 resale)
with Edge = $325 (50% of $650)
without Contract = $350 ($650 phone - 300 resale)
Considering that this is contingent on resale values and considering that I want to keep my phone number, Edge is a very good option and I am considering it for my next purchase.
The cost of Edge is about the same as buying off contract. This depends on the resale value of the phone, of course. With either, you get to keep your phone number. With cheaper or less popular Android and Windows smartphones, it might be safer to use Edge since you won't have to worry about the resale value.
To break down the options on Verizon for the cheapest iPhone 5, assuming you keep it for 1 year and assuming that in 1 year the iPhone 5 will be worth $300.
with Contract = $129 ($199 phone + 230 ETF - 300 resale)
with Edge = $325 (50% of $650)
without Contract = $350 ($650 phone - 300 resale)
Considering that this is contingent on resale values and considering that I want to keep my phone number, Edge is a very good option and I am considering it for my next purchase.
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i had a 3GS, 4S and now 5
i'm going to keep my 5 and my wife's iphone 5 for 3 or 4 years and just buy a second or third ipad with the saved money. and go to t-mobile from AT&T for the lower fees
at this point you aren't going to see much value upgrading every year. and probably every 2 years as well
i'm going to keep my 5 and my wife's iphone 5 for 3 or 4 years and just buy a second or third ipad with the saved money. and go to t-mobile from AT&T for the lower fees
at this point you aren't going to see much value upgrading every year. and probably every 2 years as well
LMAO!
, you are AT&T and Verizon's dream customer! Enjoy paying $140 for your overpriced plan, in the mean time, I am paying $45 for unlimited talk and text, 1.5 GB of data on the AT&T network, an equivalent plan is $95 on AT&T itself, same network, half price.Edit to say: Also, AT&T themselves launched a CHEAPER bring your own phone network, things that make you go hmmm
As someone who just made the move from AT&T to T-Mobile 2 months ago, I can confirm that my monthly bill is $20 cheaper with T-Mobile ($80.20 vs $60) for more or less the same plan (unlimited text/talk, 2G data).
And yes, T-Mobile separates out the phone subsidy portion as its own explicit category; it's essentially called an equipment installment payment plan, which is now $20 for me. Once I pay off the remaining value of the phone, this $20 monthly payment disappears and I keep the phone. If I was still with AT&T and my 2 year contract is fulfilled, I would still be paying the $80/month but not subsidizing any phone unless I sign up for a new 2-year contract and get a new phone.
IMHO the way T-Mobile is doing this is simpler, more transparent, honest, and in the end more flexible for the consumer. If I'm unhappy with their coverage I can terminate the service when I want to, and not have to stick with them for 2 years. It's a show of good faith, which should be encouraged.
EDIT: Also, my original AT&T plan is already discounted by $15 due to my employer; or else I would be paying $95 a month. Where I am, T-Mobile's coverage has actually been better than AT&T, which I had used for 6 years ever since the original iPhone. Overall I'm very happy with my move; gave my old off-contract unlocked iPhone 4 to my mom (who had been using an ancient Nokia), and am enjoying a new HTC One.
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And fewer people will upgrade every year.... this will be more an Apple and other phone manufacturers problem. They will have to follow the rest of the tech industry and lower their prices.
After all a flat screen TV does not cost $3000+ anymore yet phone prices stay right where they have been the last 6 years.
The verge mentions the so called subsidy model that's valued at $20/month on a 2 year contract
We switched from Verizon to T-Mobile the day they made the iPhone available and haven't looked back. We probably won't participate in their "Jump" option as buying a phone outright is still cheaper in the long run though.
I'm really glad to see that AT&T and VZ are feeling the heat. It's just too bad that when one company, T-Mobile, has opted for more transparency, the others are bent on making their "deals" even more complicated and worse, misleading.
I'm really glad to see that AT&T and VZ are feeling the heat. It's just too bad that when one company, T-Mobile, has opted for more transparency, the others are bent on making their "deals" even more complicated and worse, misleading.
What a joke. iPhone's cost $199 with subsidy. After 2 years, assuming they're in good shape, you can sell them for at least what you paid with subsidy.
So, what AT&T is saying is that I should pay for the device, pay for the subsidy and lose out on any value I might have in the phone? Are people really dumb enough to do this?
So, what AT&T is saying is that I should pay for the device, pay for the subsidy and lose out on any value I might have in the phone? Are people really dumb enough to do this?
This. For now, these new plans are totally optional. But what if it's an indication of where these companies want to go? If the past is any indication, they'll slowly push us into these plans by reducing or restricting their current offerings. For instance, what if in 6 months AT&T and Verizon both raise rates on their non- early-upgrade plans by $10 or $20 a month? They can point to their early-upgrade plans and say, "Look! We didn't raise our prices across the board, you still have the early-upgrade option at the old rates!" - but of course, with the early-upgrade fees tacked on top. Or what if they both changed their subsidized 2-year contracts to 3-years going forward? All the sudden, the early-upgrade plans' "no-contract" benefit looks a little more attractive. I put "no-contract" in quotes because you really are on contract for 20 months just instead of an ETF you have to pay off the rest of the phone at full price.
This is what they do. Remember when you could get a bucket of 250 texts for $5/mo (and incoming texts were free)? Or unlimited data for $20? In a matter of a few years, they've managed to wane (most of) us off those cheaper plans, and into "unlimited" texts for $20/mo (when most of us use Facebook, WhatsApp and iMessage now), and very limited data *starting* around $20/mo. Not to mention the minimum $40+ we have to pay for all the talking we're not doing. This just seems like a slick way to make us forget we're already paying a $20/mo subsidy on our phones, and make it seem like that's just part of the regular monthly service charge, and we have to pay for the phone on top of that.
So yes, it's a terrible deal, and barely anybody will sign up, but it's totally optional... for now.
I guess this stuff is up to the individual but the best I can tell with my Verizon, a smart phone is gonna cost you 40.00 a month plus whatever data plan you chose to share. Why in the world would I pay full price for my iPhone when I can get it for 199.00? So far it's been my experience to trade in the old iPhone at upgrade time and use the giftcard towards the new one making upfront charge nearly nothing. In my area tmobile sprint and cricket are no better than rolling down my window and hollering at who I need to talk to. An iPhone without a service plan to me is equal to having a DirecTV box without satellite service therefore both require a 2 year contract for equipment but at the end of the contract unless you change plans you will be paying the same nickel every single month for these services.
It is the full price of the phone spread out over 24 months. So for the iPhone, it is $650 over 24 months, or $27 a month.
These plans are only useful for people who upgrade at least once a year. If you keep a phone for two years, these new plans are a waste of money. Some of us do get a new phone every year, though, and this makes it easier.
Total ripoff... They should let everyone upgrade once a year at no additional cost, the only stipulation is to trade your handset in...
Buy your own phone and just pay as you go. ATT has new plans for smartphones that look like what contract prices would be without the phone subsidy.
http://www.att.com/shop/wireless/plans/prepaidplans.html
http://www.att.com/shop/wireless/plans/prepaidplans.html
Yes, they should. Their current pricing for service is already stupid high with the built in subsidy. I pay $233/month for 3 phones and 2 ipad's on 10GB data share... If I move to t-mobile I could likely save about $1000/year due to their plans NOT having built in subsidies. So yeah, my comment stands.
the phones are not free. They money you pay is not broken down. That not stated by the carriers, just more common sense. Not hard to do the math.
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Something that should be kept in mind is you are comparing the cost for an individual. You can save by sharing a plan with friends or family. I'm on a share everything plan (Verizon) with three other people. So for me, the equivalent GoPhone plan would not save me anything, it would cost me more actually, and the value is contingent on the resale value of the phone when I am ready to get a new one. My share is $55 a month.
Let's say I went with the $60 GoPhone plan. If I upgrade after 1 year, I might save $50 to $100 after selling my old phone, compared to the cost of the Edge plan on Verizon, but then again, depending on market value, I might lose $50 to $100 compared to the Edge plan. Furthermore, the GoPhone plan would cost me $60 a year ($5 x 12) more than what I'm paying now. The Edge plan seems like a safer bet, IMO.
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No, it really doesn't. Entitlement complex much?
You're not special, nobody owes you anything, and as you just displayed in your comment, you have the choice to move to T-Mobile. If that's what appeals to you, take it.
I have 5 phones and an iPad on a 10GB mobileshare, and pay $268/mo, and it was cheaper than what my family was previously paying for three smartphones on T-Mobile. In T-Mobile's defense, I have a 22% FAN discount and can't get a discount on T-Mobile at all, otherwise I would still have service with them (I have had them before and other than the smaller coverage area, I loved them). Not to mention even if you DO move to T-Mobile, you're still paying for the device somehow, whether it's to T-Mobile or not.
And, as it is, AT&T has no built-in subsidy in their service plans. The service price is the same whether you have a contract or not. The subsidy is promising to be a revenue stream for them for two years. People need to stop making up arbitrary numbers and look at it for what it is. If you don't like it, that's why you have choices. Some have even pointed out the various MVNOs that operate on the AT&T network. What really matters is the bottom line cost. People inflating the device cost with imaginary fees that don't exist on AT&T/Verizon are being disingenuous. T-Mobile is cheaper no matter how you spin it, yes. But that chart in the OP is misleading because it doesn't help those of us who don't want to use T-Mobile and therefore cannot adequately compare device purchase plans on AT&T or Verizon using said chart.
If you are not using your upgrade every two years with Verizon or AT&T, you are getting ripped off by those carriers. You are paying the $200 upfront fee with a $20 hidden fee in your monthly service that you keep paying even after the two year contract is up.
So the best two choices after your contract is up are:
1) Sell your old iPhone to cover the upfront fee of $200 with your carrier when you upgrade and re-sign a two year contract or
2) Have your carrier unlock your old iPhone and move over to T-mobile (if it's an AT&T phone) or look into the many prepaid plan options available. Prepaid plans are way cheaper and sometimes use the same networks.
So the best two choices after your contract is up are:
1) Sell your old iPhone to cover the upfront fee of $200 with your carrier when you upgrade and re-sign a two year contract or
2) Have your carrier unlock your old iPhone and move over to T-mobile (if it's an AT&T phone) or look into the many prepaid plan options available. Prepaid plans are way cheaper and sometimes use the same networks.
For me , someone who views the higher price I pay to Verizon compared to carriers like T-Mobile and Sprint as a necessary evil, and as someone who sees the entire service fee as payment for all of the many costs that Verizon must bare to provide the very high level of service they provide me, not as line items on a bill, I see this new plan as a benefit. I am resigned to the cost of service, but to be able to not have a contract and to also be able to upgrade my iPhone every year for a cost that I can afford is a big benefit.
As to the rip-off nature of these plans as some have put it, we are not privy to the full cost accounting of what is spent to provide us service, so we do not know the cost basis of our rate plains. We must just decide if we feel that we are receiving an equal value for our service to it's cost. For me, the positive values of Verizon makes it worth the (higher) cost. Same thing with the Edge plan.
As to the rip-off nature of these plans as some have put it, we are not privy to the full cost accounting of what is spent to provide us service, so we do not know the cost basis of our rate plains. We must just decide if we feel that we are receiving an equal value for our service to it's cost. For me, the positive values of Verizon makes it worth the (higher) cost. Same thing with the Edge plan.
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That is true if you are on an individual plan, but for those of us sharing a plan with friends or family, it is much more expensive to go prepaid. I pay about the same now on Verizon as a prepaid plan would be, $55 a month, plus I can get a subsidized phone. The absolute cheapest way to get a new phone right now is subsidized on a shared plan.
The Phone should be free as it is the only way to have service.
Paying for the hardware would be just to increase the memory size.
This with Android phones are more likely to be worried about upgrading the device every 3 months...
Paying for the hardware would be just to increase the memory size.
This with Android phones are more likely to be worried about upgrading the device every 3 months...
Actually, as they are publicly traded companies, we ARE privy to their costs. Go read their quarterly results where their profits have been increasing. I'm too lazy to link for you.
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You think they provide you a $650 phone for $200 every two years out of the goodness of their hearts? No, that's a subsidy. Just because it isn't a line item on your bill doesn't mean it doesn't exist.
They were just "kind" enough to find a way so that those that don't take advantage of the subsidy still pay it anyway. Such kind folks!
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Pretty sure AT&T Go plans do not let you connect to LTE. That said, the majority of subscribers to the big two are on family plans and/or have some kind of discount. If you are a single line with no discount on the big two, you should really do something about it like find a discount or go in on a plan with friends/family. Or go to t-mo if their network is good in your area.