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Why Don't Carriers Just Let Us Upgrade?

blairh

blairh

macrumors 603
Original poster
Dec 11, 2007
6,110
4,824
Perhaps my question is stupid and I don't realize it. If that is the case I'm sorry.

I'm 70 days away from being eligible to upgrade my cell phone. As an iPhone 4 user I certainly don't need to upgrade right now or in 70 days. However I've wanted a 64 GB iPhone for years now and I'd gladly extend my contact 2 yrs to get one. I'm happy enough with AT&T to do so.

So I call CS and ask nicely if I can upgrade early. The CR checks with her manager, I get a firm "no" a minute later. I did tell the CR that I'd be getting the 64 GB model potentially before she checked with her manager.

I can wait. It would be ridiculous to pay an extra $250 for the privilege. But I'm confused as to why carriers simply don't let their customers upgrade when they want knowing that they are extending their contract an additional 24 months. Again, perhaps there is a clear answer to this, but I don't see it.
 
Tell them you'll switch to Verizon if they won't let you upgrade. That may change their tune. Or they may call your bluff. :cool:
 
I think it has to do with the subsidy. I don't know what size iPhone 4 you have, but lets say you got the 32 GB for 299, that is just the price you pay initially. AT&T makes their money back on the initial discounted price you paid through the monthly cell phone payments. They probably haven't made enough money from your monthly payments to cover the actual price of the iPhone 4 yet so they can't let you upgrade. If they did they would lose money on the iPhone 4 they sold you.

The best way around this is to just sell your iPhone 4 on craigslist or something and use the money you make off of it and put it towards the 4S.
 
If you're within 30-60 days of your upgrade date sometimes managers will let it slide. I've had this happen 2 times. YMMV
 
Answer is simple. You have not used enough of the contract to really make up for subsidy your iPhone4 last time.

70 days is over 2 months left till your upgrade. That is a little long and fair amount of money. Assuming 70 bucks a month that is 140 you are taking away from them.
That 140 include profit, overhead and 300-400ish they paid Apple for your phone.
 
richpjr said:
This. The carriers are in this to make money...
Click to expand...
I read somewhere that carriers break even after the 7th month or so...It wouldn't make sense for them to only get 70 days of profit. They've been making money off of you for a while now.
 
Thanks for all the replies.

A lot of good answers, and I don't doubt you are all right, but it still seems strange to me.

I'm just going to wait till mid-December and then see how I feel.
 
I dropped in the AT&T store today, I have 3 weeks left before I'm fully upgrade eligible. No budging.

To a point I agree with the OP - why couldn't AT&T let us do an early upgrade fully subsidized in exchange for a 24 month extension (i.e. extend our existing contract by 24 months, not write a new one like they usually do). The $250 fee is silly when I have 3 weeks to go.

Ah well, in the great scheme of things it's no big deal, I'll order it online in 3 weeks. I assume that there must be some sort of "commission" or other benefit for an AT&T store to take my $400 for a new 64GB phone, so figured if I was going to get a break on the date it would be at the store. Since they let me leave without my credit card ever coming out of my wallet, I can only assume that this policy comes from "on high".
 
wahhh i want a subsidized phone but dont want to actually fulfill my contract to pay for it
 
This is like the bank customer who came in and asked if we would discount the principal owed on his loan if he paid it off. On his $1.2 million balance, he was hoping for a couple hundred thousand reduction in pay off.

Any guess on the answer to this request?
 
I'd like to upgrade to the new 4s but AT&T is telling me I have to wait until Feb, or I'd have to pay $499, $599 or $699. I might as well wait until the next iPhone is released then, so I am on schedule to upgrade with my contract. Normally I don't upgrade with each new version, but it would be nice to have that option.
 
You say you are willing to sign a new 2 year contract but are not willing to live up to the terms of your CURRENT 2 year contract....
 
Apple sells the phones to AT&T for $600. AT&T selsl the phone to you for $200. So AT&T takes an immediate $400 loss. They slowly recoup this loss and then turn a profit over time as you pay monthly payments to them. Each time they offer the subsidized price to you they're taking a big loss, so that's why make you wait for the upgrade as long as is competitively viable for them.

My numbers might be wrong, but that's the general idea.
 
whats funny is the bill of materials for a iphone is around $200, so if the carrier is paying $600 per phone, apple is pocketing $400. Greed??!? If you want the phones to be cheaper, they need to stop price gouging first. I remember when most phones were free because they were $299 without a contract and the carrier would subsidize most if not all of it.
 
HitchHykr said:
You say you are willing to sign a new 2 year contract but are not willing to live up to the terms of your CURRENT 2 year contract....
Click to expand...
Yes.

Would AT&T rather keep me as a customer by allowing an upgrade and extend my contract or losing me to another carrier after my current 24 month contract ends?
 
HitchHykr said:
You say you are willing to sign a new 2 year contract but are not willing to live up to the terms of your CURRENT 2 year contract....
Click to expand...

Ha! Seriously these are contracts not ponzi schemes! Where the paradigm has shifted is this are expensive ass phones when not subsidized.
 
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