Subsidized Smart Phones going away...

StarShot

macrumors 6502a
Original poster
Mar 31, 2014
917
341
I read a story in the paper that said various phone companies are either doing or planning to get rid of subsidized future smart phone sales. It was unclear whether ATT was thinking of doing this.

At the moment, I own my phone with a free upgrade available. In the past, I've just paid my $199/$299, got my new phone and sold the previous addition for at least what a new one cost.

Anyone have an idea as to how it will work when the new IP6 comes out. ATT doesn't seem to have the plan I have anymore. It's my understanding that I will have to give them my present phone in order to get another one rather than selling the present model myself.

One thing I won't be doing is paying Apple or ATT $600 to take the new one out the door.

Holding my breath (NOT)...
 

KUguardgrl13

macrumors 68020
May 16, 2013
2,485
109
Kansas, USA
I read a story in the paper that said various phone companies are either doing or planning to get rid of subsidized future smart phone sales. It was unclear whether ATT was thinking of doing this.

At the moment, I own my phone with a free upgrade available. In the past, I've just paid my $199/$299, got my new phone and sold the previous addition for at least what a new one cost.

Anyone have an idea as to how it will work when the new IP6 comes out. ATT doesn't seem to have the plan I have anymore. It's my understanding that I will have to give them my present phone in order to get another one rather than selling the present model myself.

One thing I won't be doing is paying Apple or ATT $600 to take the new one out the door.

Holding my breath (NOT)...
My guess is that we're moving toward a financing plan like what T-Mobile does and some of the other carriers have introduced. You would still pay $199 up front (although there will certainly be $0 down offers), but now you know that $20 or however much of your bill goes toward your phone. If you pay it off early, you can switch phones whenever. If you pay it off and don't get a new phone, your monthly bill goes down. People will have the option to pay full price, but it won't be the only option. I don't think Apple wants people to pay full price up front. They always advertise the subsidy price whenever they announce the new iPhone.
 
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mattopotamus

macrumors G5
Jun 12, 2012
13,223
3,359
My guess is that we're moving toward a financing plan like what T-Mobile does and some of the other carriers have introduced. You would still pay $199 up front (although there will certainly be $0 down offers), but now you know that $20 or however much of your bill goes toward your phone. If you pay it off early, you can switch phones whenever. If you pay it off and don't get a new phone, your monthly bill goes down. People will have the option to pay full price, but it won't be the only option. I don't think Apple wants people to pay full price up front. They always advertise the subsidy price whenever they announce the new iPhone.
this is exactly correct. The way ATT currently does subsidies your bill stays the same even after the 2 year contract. Now your phone bill will lower once the phone is paid off. So instead of paying $100 for the next 2 years and beyond, you may pay $100 for 2 years and then $70 after that if you keep the same phone.
 

maflynn

Moderator
Staff member
May 3, 2009
63,851
30,366
Boston
There are no subsidized phones in Europe AFAIK, its only a US thing and carriers are working hard to stop them. The upside is we as consumers are no longer locked into a 2 year contract
 

deeddawg

macrumors G3
Jun 14, 2010
8,200
2,082
US
Sorry, but this "locked in" myth continues to annoy me.

Nobody's been "locked in" to any cell phone contract for as long as I can remember. You could always cancel lines or switch carriers any time you wanted. Just expect to pay an ETF on your final bill. You could upgrade your phone any time you wanted, just expect to pay full price.

Don't misunderstand, dis-embedding the phone financing from the service plan is a good thing. But it's a myth that it substantively changes anything in terms of the consumer's ability to change carriers. Paying off the remainder of a financed phone isn't really any different from paying an ETF.
 

mattopotamus

macrumors G5
Jun 12, 2012
13,223
3,359
Sorry, but this "locked in" myth continues to annoy me.

Nobody's been "locked in" to any cell phone contract for as long as I can remember. You could always cancel lines or switch carriers any time you wanted. Just expect to pay an ETF on your final bill. You could upgrade your phone any time you wanted, just expect to pay full price.

Don't misunderstand, dis-embedding the phone financing from the service plan is a good thing. But it's a myth that it substantively changes anything in terms of the consumer's ability to change carriers. Paying off the remainder of a financed phone isn't really any different from paying an ETF.
but it is a big difference when you realize under the subsidy you were paying the same price even after the contract was fulfilled if you stayed with the same phone plan.
 

bniu

macrumors 6502a
Mar 21, 2010
985
179
Anyone have an idea as to how it will work when the new IP6 comes out. ATT doesn't seem to have the plan I have anymore. It's my understanding that I will have to give them my present phone in order to get another one rather than selling the present model myself.

One thing I won't be doing is paying Apple or ATT $600 to take the new one out the door.

Holding my breath (NOT)...
First of all, you are NEVER required to give them your present phone. The thing about the NEXT plans is that after 12 months, you have the option to trade in your present phone on NEXT and what you're basically doing is selling the phone back to AT&T at the price of any outstanding payments still left on that device. Think of it another way, AT&T will give you up to 40% of the original phone's value. Not the best deal in the world, but hey, if you are having trouble selling your phone above that price, then perhaps AT&T trade in would be worthwhile.

Second, you've been paying AT&T way north of $600 for a $600 phone. They've just been disguising it as your monthly rate. That's all.
 
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barkomatic

macrumors 601
Aug 8, 2008
4,027
1,798
Manhattan
I read a story in the paper that said various phone companies are either doing or planning to get rid of subsidized future smart phone sales. It was unclear whether ATT was thinking of doing this.

At the moment, I own my phone with a free upgrade available. In the past, I've just paid my $199/$299, got my new phone and sold the previous addition for at least what a new one cost.

Anyone have an idea as to how it will work when the new IP6 comes out. ATT doesn't seem to have the plan I have anymore. It's my understanding that I will have to give them my present phone in order to get another one rather than selling the present model myself.

One thing I won't be doing is paying Apple or ATT $600 to take the new one out the door.

Holding my breath (NOT)...
No one knows for sure, but the IP6 could be the last smartphone that AT&T covers with a traditional subsidy. They still offer the subsidy today, but they don't promote that option very much at all. They are clearly trying to push people to their payment program.

I'll probably take the subsidy if they offer it, but if they discontinue that option I'll just bite the bullet and pay full price for an iPhone 6 outright. The way their payment plan works is kind of a bad deal IMO.
 
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Deguello

macrumors 6502a
Jun 29, 2008
912
480
Texas
I'll probably take the subsidy if they offer it, but if they discontinue that option I'll just bite the bullet and pay full price for an iPhone 6 outright. The way their payment plan works is kind of a bad deal IMO.
How is it a bad deal? Zero percent interest while keeping the lower price for your service seems exactly like a good deal.
 

Razeus

macrumors 603
Jul 11, 2008
5,165
1,769
It seems quite bizarre.

I mean customers had to give AT&T $199 upfront for the phone and then paid the rest because it was hidden in their plans.

Now AT&T only collects $25 upfront, then for 24 months (or whatever it is). Seems like this way is more of a financial strain on them than the subsidized plans.

I would think Apple wants their money once the carrier takes shipment of the devices. That's a ton of money for AT&T to put up while users take their time to pay for the phone.
 

Wide opeN

macrumors 65816
Aug 27, 2010
1,449
756
Georgia
It's definitely interesting to see where things are headed.

I really want to go for the new plan, but I just can't give up Unlimited Data.

Too, the subsidies are worth taking advantage of as long as you can get them!!!
 

barkomatic

macrumors 601
Aug 8, 2008
4,027
1,798
Manhattan
How is it a bad deal? Zero percent interest while keeping the lower price for your service seems exactly like a good deal.
You're still making a payment every month--and even at zero interest your iPhone is locked. IMO, its better to pay it all off up front and enjoy the flexibility of an unlocked smartphone that you can take to whatever carrier offers the best deal or abroad.

The next two years is looking to be quite interesting in regard to the deals that carriers will offer.
 

Deguello

macrumors 6502a
Jun 29, 2008
912
480
Texas
You're still making a payment every month--and even at zero interest your iPhone is locked. IMO, its better to pay it all off up front and enjoy the flexibility of an unlocked smartphone that you can take to whatever carrier offers the best deal or abroad.

The next two years is looking to be quite interesting in regard to the deals that carriers will offer.
I'm not saying that paying upfront isn't better -- that's what I'll do -- but I still don't see why the installment plans are a bad deal, particularly compared to the subsidy model, which is a better comparison than an outright purchase.
 

TommyA6

macrumors 65816
May 15, 2013
1,056
516
There are no subsidized phones in Europe AFAIK, its only a US thing and carriers are working hard to stop them. The upside is we as consumers are no longer locked into a 2 year contract
Subsidized phones are not US exclusive :) .

There's plenty of subsidized phones here in Europe. 16 GB unlocked iPhone 5s is priced at 699€. However, you can buy it subsidized for as low as 1€. (by signing a 2 year contract...with a 60€+ monthly bill :D)
 

SomeGuyDude

macrumors 6502a
Mar 19, 2011
730
2
NEPA
Yeah, subsidized exists overseas, it's just comically cheap by comparison. :p

I really anticipate the whole EDGE/JUMP idea will take off. I mean it's the same net cost (roughly) if you put the phone on a payment plan but it means you can bounce out at any time or just keep your phone beyond the end of the contract and your bill goes down. Simple stuff.
 

StarShot

macrumors 6502a
Original poster
Mar 31, 2014
917
341
It's definitely interesting to see where things are headed.

I really want to go for the new plan, but I just can't give up Unlimited Data.
I gave my up limited plan up for the "tether" option. Plus, I was NEVER using more than 3 GB. Win win for me.

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but it is a big difference when you realize under the subsidy you were paying the same price even after the contract was fulfilled if you stayed with the same phone plan.
That may be true for the "keepers", but it doesn't apply to me as I so far have always upgraded to the new annual latest/best iPhone. However, checking out the new models (4.7" and 5.5"), I think the 4.7" will work for me, but I'm not getting the "small" iPad mini 5.5" no way. I just don't see how it will be a good "guy" phone to pack around.

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They still offer the subsidy today, but they don't promote that option very much at all. They are clearly trying to push people to their payment program.
If ATT is still offering the subsidy plan, I can't find it on there website. All I see is "get a new phone every year" by trading in your old phone.
 

SomeGuyDude

macrumors 6502a
Mar 19, 2011
730
2
NEPA
That may be true for the "keepers", but it doesn't apply to me as I so far have always upgraded to the new annual latest/best iPhone. However, checking out the new models (4.7" and 5.5"), I think the 4.7" will work for me, but I'm not getting the "small" iPad mini 5.5" no way. I just don't see how it will be a good "guy" phone to pack around.


Well if you've been doing that, it means you've been paying them full price. This is definitely a net win for you, then, because now instead of continuing to pay the subsidy contract price AND purchasing new devices every six months at off-contract price you get the month-to-month price on your cell bill. Big win!
 
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sandmanfvr

macrumors member
Nov 19, 2010
93
4
I see in the US, both the non subsidized and subsidized plans stick around. Why? People like going into a place and getting a phone dirt cheap, say an older iPhone, like $50 from Bestbuy etc (when they run deals etc) or even free and signing up on a plan. I have heard that from many face to face and they don't need the latest and greatest but some will not pay over $x for a phone, period. If cell companies kill the subsidized then they will lose business over time, as people will not renew. Just my opinion.
 

deeddawg

macrumors G3
Jun 14, 2010
8,200
2,082
US
If ATT is still offering the subsidy plan, I can't find it on there website. All I see is "get a new phone every year" by trading in your old phone.
Not sure where you're looking, it's right there when you look at phones.
 

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Razeus

macrumors 603
Jul 11, 2008
5,165
1,769
I see in the US, both the non subsidized and subsidized plans stick around. Why? People like going into a place and getting a phone dirt cheap, say an older iPhone, like $50 from Bestbuy etc (when they run deals etc) or even free and signing up on a plan. I have heard that from many face to face and they don't need the latest and greatest but some will not pay over $x for a phone, period. If cell companies kill the subsidized then they will lose business over time, as people will not renew. Just my opinion.
I think people would just pay the extra $25 a month.

It'll be interesting to see how this plays out. Especially with Apple trying to charge an extra $100 for the iPhone 6, yet customers don't want to pay outright for a phone.

I know for me, only 1 person at a time will be able to upgrade as my family of 3 users would add $75-90 to my monthly bill, which I don't want. And since you most likely upgrade every 2 years anyway, we'd be stuck paying that extra forever.
 
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Skika

macrumors 68030
Mar 11, 2009
2,893
868
It'll be interesting to see how this plays out. Especially with Apple trying to charge an extra $100 for the iPhone 6, yet customers don't want to pay outright for a phone.
Pls this is just something one analyst made up dont say it like its a known fact.