Sprint Stops Offering Two-Year Phone Contracts

[kdarling]

Much of what you wrote is fairly accurate, but your anti-Apple bias is showing a little bit there.

You mean my knowledge of iPhone history is showing. If anything, it sounds a lot like you're being anti-Verizon

Verizon has NEVER shied away from anything because it was "bad for the customer." Verizon's main reason for walking away from the iPhone deal with Apple originally was for the same reason why Verizon, and all of the other carriers hate the iPhone to this day: Their lack of ability to control the device, and use it to push their own services and "back room deals" onto it.

I'm sure there was some of that, but the main reasons why Verizon didn't make a deal during 2005-6 were:

1. The ROKR (aka the "iTunes Phone") collaboration didn't exactly instill confidence that Apple could make a decent device. Heck, Apple didn't have a working touchscreen iPhone to show anyone until just before its public debut in early 2007... and even some of that demo was faked.

2. Apple not only wanted full price from the customer, but to also take the customer's monthly subsidy stipend. Since it was no skin off their nose, AT&T was okay with that.

3. Apple wanted to be the point of support. Verizon historically liked being that point.

4. Perhaps most of all, Apple didn't want Verizon's sales partners (Best Buy, Walmart, etc) to be able to sell the iPhone. Verizon was not okay with that.

Ironically, some of Verizon's concerns were valid. Later on, subsidies did come back to the customer, and those same stores now sell the iPhone.

--

As for control, let's not forget that before the iPhone, you could download smartphone apps from anywhere, without the maker censoring them. Hobbyists could make and sell their own apps without paying a $100 a year membership fee or giving the phone maker a cut. You could also buy a smartphone with only a voice plan and just use WiFi for data. The iPhone changed that, too, and not all to the good.

Prior to the iPhone, Jobs used to complain about carrier walled gardens. As it turned out, he simply wanted to make his own, even higher walled garden, one where Apple was in control and got all the profits.(*)

(*) Edit: okay, almost all. Reportedly, some carriers such as AT&T managed to negotiate getting a piece of the profits from App Store purchases by their network users.

 

[Swampthing]

Here's what you see when you go to Sprint's site:

Apple never advertised the full price of the phone; not in the US at least.

Funny, I've always been able to see the "truth exposed!" full price all the time. Not sure what you're smoking. But here's a link so can you see full price just like everyone else:

http://www.apple.com/shop/buy-iphone/iphone6s/5.5-inch-display-128gb-gold-att

 

[jlc1978]

Timing wise, they each had to make sure that the others were going to do the same thing, from a competition standpoint.

From the financial standpoint, they had long wanted to do this, especially AT&T which usually became burdened with billions in subsidized devices when a new iPhone came out.

It will be interesting to see how they account for software updates that add features; given that SOX might mean that couldn't book the full sale price since the phone hadn't been completely delivered and thus booking the revenue at sale would violate the law. We may see a return to minor fees for upgrade stop avoid running afoul of the law.

I am also not an accountant but that is howI understand the post-Enron SOX rules.

 

[Waxhead138]

What's a Sprint?

More like Sprunt.

 

[Rogifan]

Funny, I've always been able to see the "truth exposed!" full price all the time. Not sure what you're smoking. But here's a link so can you see full price just like everyone else:

http://www.apple.com/shop/buy-iphone/iphone6s/5.5-inch-display-128gb-gold-att

That's on Apple's website. I was referring to carrier sites. As far as advertising, I don't think Apple has ever sent out a press release or even put up a screen shot in a keynote highlighting the full price of the phone.

 

[bstpierre]

Is there really any difference or is it really a subsidized. Because with AT&T when I decided not to upgrade my phone they gave me a discount. Which is significant discount because none in my family got a newer phone after the 2 year commitment. But if I decided to get a new phone I'm not eligible for the discount anymore. When I decided to calculate that discount it adds up close to the total price of the phone itself, including the initial payment which is sort of purchase price when you're in contract. So after all these years we are not actually getting a discounted price of the phone. I know these are all BS anyway all the carriers including T-Mo just happen that they're cheaper. Other than that majority of the consumers including me at one point are being fooled after all these years. SMH!

Did you have to ask for it or did it just show up? My wife and daughter were eligible for an upgrade for a while and we haven't seen a discount. My wife just got a new iPhone S under contract. My daughter didn't want one.

That being said, we started with just two subsidized iPhones with $30 a month unlimited data each, a $10 add a line fee and a calling plan. Then we added my son's iPhone for $10 a month plus $30 a month for unlimited iPhone data. The calling plan did not go up. The phone was subsidized. Then we added my daughter's iPhone for $10 a month plus $25 a month for 2GB of data. The phone was subsidized, the cost of the calling plan did not go up.

I get that the phone isn't free and I have to be paying for it somehow but what this implies is that AT&T hid the cost of five phones into their calling plan (five phones is the limit on our plan) and we were paying for that whether we were getting phones or not. Even we we just had two phones we were covering the subsidy cost of five phones. Does this make sense to everyone or am I missing something?

As an aside, someone mentioned the unlimited data is going up $10. It is only going up $5.

 

[Rogifan]

Did you have to ask for it or did it just show up? My wife and daughter were eligible for an upgrade for a while and we haven't seen a discount. My wife just got a new iPhone S under contract. My daughter didn't want one.

That being said, we started with just two subsidized iPhones with $30 a month unlimited data each, a $10 add a line fee and a calling plan. Then we added my son's iPhone for $10 a month plus $30 a month for unlimited iPhone data. The calling plan did not go up. The phone was subsidized. Then we added my daughter's iPhone for $10 a month plus $25 a month for 2GB of data. The phone was subsidized, the cost of the calling plan did not go up.

I get that the phone isn't free and I have to be paying for it somehow but what this implies is that AT&T hid the cost of five phones into their calling plan (five phones is the limit on our plan) and we were paying for that whether we were getting phones or not. Even we we just had two phones we were covering the subsidy cost of five phones. Does this make sense to everyone or am I missing something?

As an aside, someone mentioned the unlimited data is going up $10. It is only going up $5.

I'm pretty sure under the old way even when your phone was technically paid off your bill didn't go down. Now once you pay off the phone that monthly charge goes away.

 

[newyorksole]

I don't understand what you guys mean when you say if you sign a 2-Year contract that the price of the phone is "bundled into your plan". How so?

Last year I had 4GB with AT&T. $70 for the data and $40 for the line. That's $110 with unlimited minutes and texting. Let's say I paid $299 for the phone.

 

[2457282]

One more carrier about to expose the true premium prices that Apple charges. No more concealing the truth.

Should be interesting when Apple announces pricing for the next iPhone.

I'm interested in what this means for future iPhone pricing. Now that everyone will see the unsubsidized price. It will no longer be masked at 199/299 type price points. I've learned that there's a surprising number of people who don't understand that those 199/299 prices aren't the full price of the phone.

Apple is already ahead of all of you on this. With the 6s release they announced their own purchase plan of $37 per month with yearly renewals (in the US). I checked ATT website and the difference between the samsung S6 and the Apple 6s is $2/month -- a difference that will not sway most people. Tmob has a price difference between $2-$3 depending on model. So no the price is not exposed because in general no one will pay the $650 to $950 for the phone outright (although I will admit I did). And when compared to the Samsung the premium is only $100. So will that $100 make a difference to someone like me that had the cash in hand to buy a phone? I don't think so. the difference is not great enough to be a deal breaker. because there are other criteria that I think is more important to most people.

 

[AustinIllini]

And your point being?

I'd rather pay extra to get an iPhone and also a piece of mind with their post sales support, than cheap out and buy an Android phone whereby I have to send the phone in just for basic warranty.

My point is this new transparency will likely kill off any flagship device not made by Apple/Samsung.

 

[rhett7660]

The "Top Flight" Android device costs $550 with a screen larger than the iPhone 6S+

Soon, the only manufacturers that will dare make their base models so expensive will be Apple and Samsung.

Um, where are you getting that price for a "Top Flight" Android device. A quick search of Sprint Samsung Galaxy S Edge 64gb at full price is $814.00

http://shop.sprint.com/mysprint/sho...=AAL&planSKUId=&ptn=&tabId=&isDeeplinked=true

Right now MacRumors would not let me upload the screen shot.

 

[bstpierre]

I'm pretty sure under the old way even when your phone was technically paid off your bill didn't go down. Now once you pay off the phone that monthly charge goes away.

Yes, I know that my bill will not go down when I technically have paid off my phone. My point was that my bill didn't go up when I added an additional subsidized phone (other than the itemized items).

And, regarding:

Funny, I've always been able to see the "truth exposed!" full price all the time. Not sure what you're smoking. But here's a link so can you see full price just like everyone else:

http://www.apple.com/shop/buy-iphone/iphone6s/5.5-inch-display-128gb-gold-att

"Always" being exposed to the truth on that apple website might be a stretch. AT&T no longer allows any other store to sell a subsidized phone, only AT&T stores can do that for the last year, so there is no subsidized price for them to display. In the past, I know you couldn't buy an unlocked phone at launch and I think you couldn't buy a phone without a calling plan so they probably didn't show the full purchase price then, either. If I recall correctly.

 

[kdarling]

While that is a good idea, the ISPs would probably kill that. Comcast and ATT lets you roam on their hotspots but only if you are a customer or the location , such as McD's pays.

I doubt ISPs would be willing to carry wifi traffic for non-customers for free.

Exactly.

Plus, his idea wouldn't fly with those who had to pay for (or share) limited bandwidth.

Still, apparently it's one reason why Apple's Airport base stations supported a guest mode starting in 2009.

 

[Mac Fly (film)]

I'm interested in what this means for future iPhone pricing. Now that everyone will see the unsubsidized price. It will no longer be masked at 199/299 type price points. I've learned that there's a surprising number of people who don't understand that those 199/299 prices aren't the full price of the phone.

No offence, but are Americans stupid? I'm confident your comment could not be made by a European.

 

[macintologist]

Should be interesting when Apple announces pricing for the next iPhone.

They do it already. They list the full price, alongside with the monthly price.
http://i.imgur.com/1R2FXCv.png
[doublepost=1452263298][/doublepost]

But they're still not putting a giant $649 price tag next to the phone either.

Yes they are. From the Apple Store website today. http://i.imgur.com/1R2FXCv.png

 

[jamesnajera]

Now T-Mobile should go back to offering 2yr contracts with phone subsidies.

Or

Apple should buy two Carriers and start offering there own cellular services.

 

[macintologist]

You probably don't get any service lol

Cricket runs on AT&T

 

[kupkakez]

For everybody thinking Apple has to "reveal" their "true" price, it's not going to happen. They are going to pimp the iPhone Upgrade Program during the keynote.

 

[Chupa Chupa]

A lot of posters screamed from the mountaintops they were leaving AT&T when they announced this same things.

Where do they intend on going, exactly?

Honestly, I'm considering an MVNO using ATT or VZW towers. Cricket offers 10GB LTE data for $55/mo. For my uses that's as good as my current "unlimited" plan on ATT and about $25 cheaper too. The only "down" is MVNO don't have an international roaming plan so I'd have to hunt down a SIM for every country I travel to.

 

[KindredMAC]

I'm not too happy about the end of subsidized pricing. I have always collected Apple Gift Cards in the past at Birthdays and gift giving Holidays to purchase my iPhone every two years. Now, I have to look at having an increased monthly cost factored into my finances just to be able to get a phone every two years. I had a great system worked out since iPhone 1 and now it's shot to **** and I have to figure out a different way.

 

[PlainviewX]

A lot of posters screamed from the mountaintops they were leaving AT&T when they announced this same things.

Where do they intend on going, exactly?

Verizon?

 

[macnewbie91]

The government should force carriers to list both the price per month, the term length, and also the full price of the phone at the same time. Consumers will start to realize how much an iPhone or Samsung device actually costs. Many customers believe the price they pay on a two year contract is the actual price of the phone.

Masking the cost to $199 on contract brainwashes stupid people into selling the unlocked version later on for less money. At least with this new payment structure, everyone should be realizing how much they've paid/are paying for the device.

Personally, I think this makes it easier to choose a plan. If I go out and buy a $629 Sony Xperia Z5 Premium (unlocked), I'd be able to knock a certain amount off of my bill every month. If I had to finance the phone over 12 months, it'd cost me an extra $52 a month on my bill to pay for the phone.

 

[Costino1]

I hate this.

I have no issues at all getting "locked" into a 2 year extension with Verizon each time I upgrade. I like Verizon's speed and service and I'm not leaving.

I used to love paying $299 (or $199) for my iPhone and selling my prior year's phone for around that, basically getting a new phone for ~$30.

So now we have to pay more out of pocket for the full price of the phone or tag on another $30 a month to pay for the phone.

 

[zed1291]

Wait. Does that mean existing Verizon customers can still get subsidies via 2 year contracts?

Yes, we can

 

[AustinIllini]

Verizon?

Go while you still can, then. VZW will definitely follow shortly.

And, FYI, that's not a good idea

Every single one of Verizon's new contract-free plans will save you money over the course of two years, when compared to Verizon's old two-year contract plans. At minimum, you'll save $3 a month by going contract-free. You can save up to $40 each month, depending on how much data you use.