Sprint Stops Offering Two-Year Phone Contracts

[BJMRamage]

this is basically NOTHING.

I worked out 2-year price comparisons for buying out-right, buying on contract, and buying with Lease-style plans. They all came within a few bucks for a 2-year period. after the 2-year period the price was just service.

buy on contract and you pay extra per month. buy on "lease-style-monthly payments" and you get a line discount but then you pay each month...pennies difference between the two. Buy outright and you pay all up front WITH taxes and then lower bills each month BUT all three end up being about the same for the consumer.


So, WHY are the companies doing this setup? people don't like the idea of "contracts" the idea of an early termination. so along the way they came up with "contract-free" service/payments. the consumers felt better but the price is still the same. NOW, a Company LOVES knowing they are getting a monthly payment from a consumer....SUBSCRIPTION. the idea behind 2-year contract is some people will still hold onto their phone after the 2 years and that means the phones are "older" and people aren't using as much data. With a Subscription plan consumers are used to paying that extra fee to buy the phone each month and when a new phone comes out, they Company tells the Consumer they really should just upgrade, it'll be the same price they are paying now, no increase. the Consumer believes this and then with all the new Phone Specs, they use more data...and the Company gladly sells them a higher plan.

 

[milo]

So now that all the other companies have dumped contracts that subsidize a phone, are any of the other companies as cheap as T-Mobile? Honestly I haven't checked since the recent changes.

 

[Atomic Walrus]

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.

They still won't, I'm guessing. If all the subsidy plans disappear they can just quote their own installment plan prices.

 

[Swampthing]

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.

Perhaps. But your all-inclusive statement was "Apple have never..." It did not say "Carriers have never..."

 

[Mr. Buzzcut]

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

Easy. "Just $26 per month." Fits right in with all the other Apple MRCs.

 

[Leonard1818]

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.

This. I can't believe how many people think an iPhone only costs $199 -- like my parents and my in-laws. What's worse is that my parents STILL think that's a lot to spend on a phone... Neither set of people understand that the subsidy is baked into the monthly bill and they're not really SAVING any money by not upgrading. They're leaving $450 on the table by not upgrading and "saving" the $199 that they would have spent. I kept telling them "even if you don't want a new phone, just get one and I will sell it for you" no dice.

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

I did in Sept.

Absolute crap. If you have 2 lines at $160/month, they are paying the subsidy. 2 years later you own, and can sell, the iphone for $200. Under the new scheme, your line cost is the same, (win for them), you pay a ridiculously high minthly lease, (win for them), and you give them back you phone to them at upgrade time, (win for them). Where's the outrage? At the very least, if they aren't paying the subsidy, your line cost should decrease.

I don't know about sprint or ATT but you can do the payment plan through Apple and at the end, you own the phone. The only time you have to turn it in is if you don't want to pay it off in a lump sum (like if you want to upgrade annually). It's really not that different to the consumer, from a financial perspective.

 

[Orlandoech]

Cricket runs on AT&T

Well damn lol.

 

[azentropy]

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.

Because you then can switch to the Mobile Share plan where you would pay $50 for the data and $25 for the line. So your payment would be $75 instead of $110. So right now you are basically paying $35 more for your "bundled phone".

 

[bstpierre]

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

And, FYI, that's not a good idea

It is too late to go to Verizon for contract phones. You have to already be there.

 

[normanfox]

Why does everyone read "Carriers stop offering contracts" and assumes it means "people will see $649 and run like hell out of the store" ?

This article, in particular, says "New Sprint customers will be able to purchase their phones through Sprint programs like Easy Pay and iPhone Forever."

And other carriers offer similar payment programs.

You never had to pay full retail price for a smartphone! And you don't have to now either! Nothing has really changed.

Contracts are gone... but the ability to pay for a smartphone over time is still there. The end result is the same.

So I don't envision people abandoning "expensive" smartphones. If anything... it might make it easier to handle.

The end result might be the same regarding cost but both methods would affect people's decision differently.

old method of phone plans that include phones cost
1) mask the true cost of the phones. many people not even aware that iphone cost $650.
2) force people to upgrade phone very two years, whether they like to or not. this creates a lot of waste.
3) people are stuck with carriers for 2 years due to plan contract

New method of removing phone cost from plan:
1) people now can see a separate cost item on their bill and are aware of phone cost
2) for many people, they would save money with cheaper plan and keep their old phone longer.
3) no more contract, you can buy iphone from apple with their loan, and free move to any carrier of your choice.

Big difference!

This affects me personally. I would not upgrade to new iphone very two years as I did for the last 5 years. and if I buy a new iphone, I would either pay it off or buy from apple using their loan. then I can move to any carriers at anytime to get better plan deals.

 

[macfacts]

Can someone explain to me like i'm 5 why american phone companies just decided to do this all of a sudden?genuinely curious.

Situation 1: Mobile Phone Company wants to raise service costs.
Old way: Users can switch to a different company and get out of their current contract and not pay the ETF cost.
New way: Users can switch to a different company but still has to pay off the remaining cost of the phone.

Situation 2: Apple wants to raise the price of their phones or keep 16GB as the base standard.
Old way: Customers see the upfront cost of their phones go up by increments of $100.
New way: Customers see upfront cost of just sales tax and monthly costs increase by $5, plus or minus a bit.

Seems to me this is a way to easily increase costs later but keep them hidden in small monthly costs.

 

[AbSoluTc]

The image they use in that memo speaks volumes. Terrible choice to show what a 2 year commitment looks like. Chained hands. Lol

 

[chasonstone]

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

Saying "No offense" doesn't make something less offensive. But it's not that Americans are stupid, it's that up until fairly recently we've only had contracts and subsidies. So there's a fair amount of people who have never seen the full unsubsidized price on their phones. They upgrade every two years or more and have only ever seen the 199 price. They've paid 199 for their phone and the rest has been sold to them as the normal price for cellular service. Because even if they don't upgrade or brought their own phone that price never changed. But now they will see what's actually cellular service and what's for their phone and they'll see for the first time what they've been paying for their smartphones. What I'm saying and interested in, is whether we will start to see the monthly installment for a phone advertised or whether we will get more sticker friendly total prices. Think 599 instead of 649. But as some other posters have mentioned it seems many carriers have already started advertising the monthly installment price instead of the contract price.

At keynotes Apple has always touted the 199/299/399 price points, which are the contract prices, but with no major carriers offering contracts anymore I wonder what they'll show up on the big screen.

 

[aPple nErd]

how is this cheaper if you stay with the same carrier for 2 years anyway? it's not. so stop defending the carriers when most people stay with the same carrier for much longer than 2 years. glad i'm still with Verizon.

 

[Chupa Chupa]

At keynotes Apple has always touted the 199/299/399 price points, which are the contract prices, but with no major carriers offering contracts anymore I wonder what they'll show up on the big screen.

Don't remember what Apple did last year -- you couldn't buy subsidized phones directly from Apple then either, only payment plan phones. But I assume they'll show some graphic for the monthly cost like "As low as $xx.xx per month" next to each model.

 

[Mr. Buzzcut]

This is what really bothers me. They are unbundling the phone as part of the plan, but not compensating the customer in kind.

You need to check again. The price drops significantly without the phone.

 

[KdParker]

cost of your own device on a monthly bas

For me and many others, the "premium" price is worth it.

And besides... for those who continue to use carrier financing to purchase or lease phones, the game hasn't changed that much. Instead of the subsidization costs vaguely being applied to the bills of all postpaid customers, you're simply subsidizing the cost of your own device on a monthly basis.

This is what I have been saying all along.

With this subsidized pricing, it is really about the same cost per month. And if you keep the phone for 2 years, then you have paid of f your phone to sell.

The next and edge programs are rip offs IMHO since you don't walk away the phone when you decided to upgrade.
[doublepost=1452273016][/doublepost]

Don't remember what Apple did last year -- you couldn't buy subsidized phones directly from Apple then either, only payment plan phones. But I assume they'll show some graphic for the monthly cost like "As low as $xx.xx per month" next to each model.

You could get subsidized phone with Verizon through Apple web site when the 6s was released..

 

[joueboy]

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 glad you brought the unlimited part because that was my original plan back from iPhone 1. We had the plan for awhile but since all the throttling and I'm trying to save some money, I got tricked on switching into family data share. But without overages the plan was perfect just right in there. Then it got better additional savings around $18 per month for every phone. I believe it's all automatic as soon as my contract expired. Really enjoyed the plan and good coverage then I inquired about getting a new phone. The store told me that once I get a subsidized phone I'm no longer eligible for discount. So I decided to just keep my phone for awhile then I switched to Cricket for the same coverage, save more money and additional SIM for my iPad Air 2. One way or the other you are paying penalty for that subsidized phone. It may not reflect on your bills but I do believe you are somehow paying for it. Now the question is since you are on the unlimited plan and your contract is over maybe you can ask them for discount. Or maybe they won't give you a discount to burden you for being still on unlimited plan. They want you to get out of that plan no matter what. If you have the discipline you can significantly lower your phone bills. If not then you will pay the price big time on overages and it happened to me multiple times. Besides the unlimited is not actually unlimited anymore and Cricket works for me.

 

[aliensporebomb]

The loss of subsidized phones is bad news for those who get reimbursed for monthly cell plans by their company. In the past you'd be able to get a new phone every 2 years for $199/299, now you have to fork out the full price.

True but I have this now - I submit the bills, only get paid back for the cell part of the bill and any beyond that is paying whatever installment for the phone that I pay out of pocket. It's kind of like how my company handles family plans for cell phones - they only reimburse the portion you actually are entitled to.

 

[pat500000]

Even if you got a nice pair of running shoes, you ain't gonna SPRINT.

 

[Apple.Fanatic]

You need to check again. The price drops significantly without the phone.

This wasn't case for me. I'm in a $45 month plan with Verizon (2 yr contract). Out of contract my bill is still $45 month but I would then have to pay $22+ extra to buy the phone. I have to pay $200-300 for phone under contract up front vs $0 with monthly bill but overall if I don't plan on buying a new phone every year I'm saving money in a contract.

I typically keep my iPhone 2 years. Currently have iPhone 6 and will get iPhone 7. I trade in my iPhone 6 or sell on eBay for $200-300 and put that toward my new iPhone. So I really only pay anything extra for my new phone because I sign up for contract that has rest baked into my $45 bill (but would still be $45 if not in contract).

 

[topdrawer]

well, i won't be buying a new iphone every 2 years anymore. i'll probably stick with my current one for 4 years, unless apple can offer me a good deal. i don't need it to do anything fancy anyway. mostly text and maps. i might even be able to stretch my iphone's life to 6 years.

 

[Mr. Buzzcut]

This wasn't case for me. I'm in a $45 month plan with Verizon (2 yr contract). Out of contract my bill is still $45 month but I would then have to pay $22+ extra to buy the phone. I have to pay $200-300 for phone under contract up front vs $0 with monthly bill but overall if I don't plan on buying a new phone every year I'm saving money in a contract.

I typically keep my iPhone 2 years. Currently have iPhone 6 and will get iPhone 7. I trade in my iPhone 6 or sell on eBay for $200-300 and put that toward my new iPhone. So I really only pay anything extra for my new phone because I sign up for contract that has rest baked into my $45 bill (but would still be $45 if not in contract).

Well we can only really compare plans currently offered. Individuals do seem to lose out because there is no sharing of data. But in general the data and access is cheaper on the "Verizon Plan" than it was on contract. I moved over because I don't upgrade that often and my two phone plan dropped about $50. I do have a discount so ymmv somewhat.

 

[nj1266]

With all due respect, you're out of your league on this. The Nexus 6P is THE premium Android device with a larger screen than the iPhone 6S+ that is also $200 cheaper.

Perhaps you didn't read the part of my statement where I said "Soon, the only manufacturers that will dare make their base models so expensive will be Apple and Samsung."

A premium phone that bends. That is premium alright.

 

[nj1266]

Comparing 64 GB models, the 6s+ is $300 more expensive than the 6p. That's quite a difference for a phone that really isn't better (IMO) than the 6p.

The 6s Plus does not have a bending problem like the 6p does. Just pay a visit to XDA and read the growing thread of 6p phones that bend where the volume and on/off button meet.