Early upgrade fee

Discussion in 'iPhone' started by tl01, Sep 7, 2012.

  1. tl01 macrumors 65816

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    #1
    Who gets the money from this fee? If I get a new iPhone from the Apple website for AT&T and use the early upgrade, does that not benefit AT&T when I pay them the fee. AT&T says that Apple gets the fee above and beyond the normal cost of the phone and that AT&T gets no part of it. Is that true?
     
  2. Spink10 macrumors 601

    Spink10

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    #2
    doubt it - Apple gets its cut first - they dont care how much you pay AT&T
     
  3. willmtaylor Suspended

    willmtaylor

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    #3
    To my knowledge, cell providers pay Apple for the phones & after that they're the cellular providers' problem, and providers are free to charge whatever they like.
     
  4. cableguy619 macrumors 6502

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    #4
    Just about any provider of a service they will offer an introductry price. Prices are set to cover the instalation, labor, etc usually, but in some cases after a service is started a company may not be making money on the service they offer until 6 to 12 months of the service activation.

    So in this case ATT buys phone from Apple(they bring the cost down by offer sub pricing), the cost of labor to activate services(paying the person who help you get services up), and the service level you sign up for.

    Once the consumer has paid the price of the phone, upgrade fee, activation fee at purchase ATT or any provider really has only covered a portion of the cost. So the higher the service level a consumer signs up for the faster ATT/VZN/etc will see a return. Every business works this way in one way or the others...

    Best part for wireless provider is once the services are up a cosumer doesnt require much support or hands on support so once the initial piece is done all the return anywhere from 6 months on usuually becomes pure profit.
     
  5. sulpfiction macrumors 68030

    sulpfiction

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    #5
    False. Most businesses don't work this way.
     
  6. tl01 thread starter macrumors 65816

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    #6
    But from whole are you buying the phone if the transaction occurs on the Apple web page ?
     
  7. willmtaylor Suspended

    willmtaylor

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    #7
    As a general rule, don't trust anything cellular provider reps say. That sounds like BS to me.
     
  8. cableguy619 macrumors 6502

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    #8


    so you are saying a company who offers a service will eat all the cost?

    i work for one of these telecomm companies and will say we are not willing to eat the cost just for the cosumer. There is a cost associated with it and COMPANIES are not willing to lose money.. the reason they are in business is to make money.

    Why do you think they make you sign a contract when you use a sub. phone pricing?

    When you pay full pricing you have covered the phone pricing, 36.oo activation covers the initial labor or cuts into it. "no such thing as a free lunch."
     
  9. willmtaylor Suspended

    willmtaylor

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    #9

    I sincerely hope you're not defendinfpg your Ma Bell's activation policy. What a crock.
     
  10. Applejuiced macrumors Westmere

    Applejuiced

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    #10
    What difference does it make?
    Apple gets paid for their device one way or another.
    You pay full price and get it unlocked they get the money from you in full.
    You buy it as upgrade and pay $199 they get the rest of the money from your carrier that in turn ties you into a 2 year contract.
    You do an early upgrade then you pay more for the device and the carrier pays less or the difference and allows you to upgrade early.
    Its simple. What website or what register you pay at makes no difference. Wether that's AT&T, walmart,Apple, best buy etc...
     
  11. tl01 thread starter macrumors 65816

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    #11

    It makes a difference to me. I upgraded early and paid $250 extra for the privilege of having my iPhone 4s 6 months early. Now they say I'm not eligible yet bc I did the early upgrade: everyone on my family plan who bought their phones the same day is eligible now. Seems paying the $250 more than covered 6 months profit. In addition...AT&T is saying this is their policy bc apple makes the extra $250 on the phone which I think is nonsense. I think it goes toward paying the difference to apple for the phone.
     
  12. dave006 macrumors 68030

    dave006

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    #12
    OK let's break this down. AT&T pays Apple a fixed price for every "AT&T" iPhone that is sold via any Point of Sale. It does not matter if you purchase from AT&T, Apple, Target, Walmart or BestBuy. The price is much higher then the $199 subsidy price on the 16GB model.

    AT&T uses the subsidy model to get you to lock into a two year service commitment and they allow you one hardware subsidy normally between 18-24 months. They make their profit a little each month so the $250 profit is not recovered in the first 6 months as you hoped.

    Those are the basics. Now, when you pay the Early Upgrade Fee of $250 you are helping to offset the cost that AT&T has to pay for your "additional" device. You already used your first device subsidy when you purchased your iPhone 4S as an "Early Upgrade" last year before your two year service commitment was complete. Again AT&T pays a flat fee to Apple so that's why they want every "AT&T" iPhone to be activated on AT&T. It helps offset the cost per device they have to pay to Apple.

    There is no Free Lunch with the subsidy phone model here in the US. The device costs the carrier much more then the $199 you want to pay. If you don't like this model just purchase at the "No Contract" price and you are free to purchase as many devices as often as you want. :D

    Also remember that your existing 6 month old iPhone 4S shoud be at least worth $250 :eek:

    Dave
     
  13. cableguy619 macrumors 6502

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    #13
    lol nope just understand it's business.. no matter wher eyou go someone does it to you.. I mean does every iPad cost 499.99 to make?

    Intel chips 300.00 plus? I mean when I buy from an intel buddy I get it at 40% lol tell me alot about the price mark up. but than again its about making money.

    when you have a plummer over do they not charge you for the service call? and everything on top of that?

    ----------

    well said :)
     
  14. 617aircav Suspended

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    Jul 2, 2012
    #14
    Your $250 early upgrade came with a two year contract. You have not fulfilled this commitment yet, thus you are not eligible for the new 2yrs agreement price.
     
  15. thekev macrumors 604

    thekev

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    #15
    It's whatever terms you signed, but the 4s debuted something like a year ago. Of course you're not going to get an upgrade now without paying a fee. Let me explain your last upgrade. You had a contract. You wanted to upgrade early, so they charged you to effectively pay off the remaining subsidy on your prior phone. That's pretty much it. You were paying off the old one rather than into the new one. Otherwise they would be granting you a two year subsidy rate on an annual upgrade. Does that make sense? If you don't feel the rates are fair, you could always buy an unlocked version from Apple or leave AT&T. T-mobile is actually pretty cheap if you bring your own phone. I still don't understand why everyone cares about having the latest phone.
     
  16. Ayemerica macrumors demi-god

    Ayemerica

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    #16
    Bingo
     
  17. tl01 thread starter macrumors 65816

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    #17
    I am not asking to upgrade without a fee. They won't let me do an early upgrade right now and pay a fee. I get the whole two year contract. I'm actually reasonable bright and understand what a contract is... What I don't get us why the other lines are eligible for an EARLY upgrade and I'm not? I don't expect any company to pay my way... Like I said $250 is a lot to pay for an early upgrade 6 months early.

    AT&T told me that they don't see any part of the $250 and I'm trying to figure out if that is true.

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    This doesn't help me. I want to pay the early upgrade fee and they won't let me. I'm not trying to get any free lunch. My phone is worth way more then $250 but some of us have other financial obligations like private school tuitions for kids... And don't want to spend more than we have to. I understand that the fee offsets the cost bc I haven't fulfilled my contract... But why won't they let me do it now. AT&T is saying they don't get the $250... That instead apple makes $250 more for my early upgrade and that's why they won't let me do it this time. I find that hard to believe.

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    All the lines came with a 2 year agreement. Why is mine different? I have no issue paying the fee.
     
  18. thekev macrumors 604

    thekev

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    #18


    Oh I misunderstood. Bleh if you all upgraded to 4S phones I'm not sure why one is and another isn't. Also if they're charging you that much, it may very well be worth just buying phones outright then selling them when the new ones come out. I remember it used to be around $300 to break contract. It seems like that should be somewhat amortized. I always hated AT&T. They used to mess up my billing, and the iphone wasn't enough to put up with that.
     
  19. tl01 thread starter macrumors 65816

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    #19
    Only I did an early upgrade. My brother's line is the main on and he got the full one, my mon's line was eligible bc she had a 3GS, and my dad and one other line were set up new.

    Here's the kicker... We have no contract bc AT&T terminated the contracts on all our lines bc of problems we had. I was thinking of selling all the phones and starting fresh again and giving up my "unlimited" data and just having more shared data unthrittled.
     
  20. thekev macrumors 604

    thekev

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    #20
    Weird..... I don't get this. How can you be ineligible if you aren't under contract? I get not wanting to give up your grandfathered plan.
     
  21. tl01 thread starter macrumors 65816

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    #21
    They released from our contracts in case we chose to leave bc of issues with customer service but kept our upgrade date bc they didn't want to give us a discount early... Which I totally understand.
     
  22. Applejuiced, Sep 8, 2012
    Last edited: Sep 8, 2012

    Applejuiced macrumors Westmere

    Applejuiced

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    #22
    Everyone likes to point the finger on the other. Oh it's not our fault it's them:)
    But I heard that if you do an early upgrade then cannot do another one in a row. You have to wait for your full upgrade to come. AT&T policy.
    Nothing to do with Apple.
    And the other lines are eligible for an early upgrade cause they didn't do an early upgrade last year. Only you did. They had a full upgrade.
    You cannot do early upgrades every single year. Not sure if you get it yet.
     
  23. 617aircav Suspended

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    Jul 2, 2012
    #23
    Op do you plan on going through this every iPhone release? Just buy it outright so that next year you will qualify for a complete discount. You can't eat your cake and have it. Sell your 4s for 300 and that will take care of the 250.
     
  24. tl01 thread starter macrumors 65816

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    #24
    It's funny bc apparently no one knows how it works. I will qualify for the early upgrade shortly... Just not as soon as I would like. Also, you all give lots of advice for questions not asked.

    I just wanted to know who get the extra $250 bc AT&T says they don't and I don't believe that.

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    I'm not pointing the finger at anyone. I'm trying to understand who gets my extra $250. Why is a full upgrade holier than those who pay the difference in an early upgrade?

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    This time I don't want to buy it outright. That's a lot of money to spend when I want at least a 32 gb phone. I have lots of things to save for.. And I choose not to spend my money that way.
     
  25. Applejuiced macrumors Westmere

    Applejuiced

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    #25


    I explained it to you above.
    Your extra $250 goes towards the phone but AT&T pays less for your early subsidy than they would if you had a full upgrade. You pay $450 for the base model for example and AT&T pays the rest $200 to Apple for your phone. If you had a full upgrade you would pay $200 and AT&T would put in the rest $450.
    Is it really that hard to understand?
     

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