Will ATT Share Plan Reduce Number of People Upgrading? (just keeping old phone)

[nostresshere]

Early this year, I had 4 iphones and was paying about $230 per month. I also paid extra for ipad cell service.

Switched to Share plan and it is now $160 per month.

Under the old plan, I could just pay $100-$200 for a new upgraded phone and my monthly charge would not change. Happy camper getting upgrades on a regular basis.

Now, I am saving lots of money and have more shared data plus tethering. BUT - if I want a new phone I will have to shell out $750 (32mb) or pay the NEXT payment. Either way, I now see how much it will cost. Even though it is less than the old way, it is REAL MONEY.

How many people will look at this and say - No thanks, I will keep my current phone for another year?

Did ATT (and others) shoot themselves in the foot?

 

[rrm74001]

If you are questioning whether or not you want to upgrade, you should not be on the "NEXT" program. NEXT is for people that want to upgrade whenever they want (without regard for cost).

I assume some sales person pushed you on to it?

 

[Applejuiced]

Early this year, I had 4 iphones and was paying about $230 per month. I also paid extra for ipad cell service.

Switched to Share plan and it is now $160 per month.

Under the old plan, I could just pay $100-$200 for a new upgraded phone and my monthly charge would not change. Happy camper getting upgrades on a regular basis.

Now, I am saving lots of money and have more shared data plus tethering. BUT - if I want a new phone I will have to shell out $750 (32mb) or pay the NEXT payment. Either way, I now see how much it will cost. Even though it is less than the old way, it is REAL MONEY.

How many people will look at this and say - No thanks, I will keep my current phone for another year?

Did ATT (and others) shoot themselves in the foot?

True, its a trade off.
You cant have both a cheaper monthly non-contract service and still receive a full subsidy of $450 per line.
My guess is most will just tuck it onto their monthly plan with 'Next" instead of paying full price at once.
Both ways its still real money

 

[kaielement]

If you do 2 year upgrades yes your bill will go up because you no longer get the line access discount. But if you do next you pay the full coast over 18-24 months and your bill pretty much goes up to what it would be if you did the 2 year upgrade. So in the end comes down to upfront coast. You could pay 199.99 plus tax plus upgrade fee (which is now $40) or do next and just pay taxes. Either way your bill is about the same more lot less over 2 years. I don't see it as them shooting themselves in the foot. I mean the savings you get in the up front coast is way more then enough to make me want to do next rather then ever sighn a 2 year agreement ever again. Really there are a lot of people out there who do want the latest and greatest and get the best deal. If people would just do the math they would see that doing the next in most but not all is very beneficial. But if you don't want you bill to ever change then yes by all means stay on an old phone until the end of time, or get with the times and upgrade the choice is yours. Nothing in life is free.

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If you are questioning whether or not you want to upgrade, you should not be on the "NEXT" program. NEXT is for people that want to upgrade whenever they want (without regard for cost).

I assume some sales person pushed you on to it?

By the way I don't think they are on the next program from what I can gather and that's his point. If they get new phone by doing upgrades or next his bill will go up and that's what he is complaining about. What I am saying is nothing is free and if you want new phones you will pay one way or another. But in most cases the next program makes more sense and will save most people a lot of money.

 

[nostresshere]

Let me put this another way.

OLD CONTRACT PLAN : If I want an upgrade, seemed rather painless. Just give them the $100-$200, sign up and away we go. People keep getting new phones - because after all, they are eligible for a free/cheap upgrade. (so they think)

UNDER NEW SHARED PLAN: If I want to upgrade, I have to shell out serious money. the 2 year cost might be the same, but not one has to actually pay for the phone. It makes one think twice.

My daughter is a good example. Her 16gb Iphone5 is always full. She is ready to step up to either 5s or 6 with 32gb. Told her is no longer just an upgrade of $100-$200. You have to BUY the new phone (upfront or NEXT). Now she is thinking she will not bother.

 

[darknyt]

Let me put this another way.

OLD CONTRACT PLAN : If I want an upgrade, seemed rather painless. Just give them the $100-$200, sign up and away we go. People keep getting new phones - because after all, they are eligible for a free/cheap upgrade. (so they think)

UNDER NEW SHARED PLAN: If I want to upgrade, I have to shell out serious money. the 2 year cost might be the same, but not one has to actually pay for the phone. It makes one think twice.

My daughter is a good example. Her 16gb Iphone5 is always full. She is ready to step up to either 5s or 6 with 32gb. Told her is no longer just an upgrade of $100-$200. You have to BUY the new phone (upfront or NEXT). Now she is thinking she will not bother.

This is where you are confused. You have always had to pay for the phone. You just paid a hidden amount inside your telephone bill over two years to make up the difference between the upfront cost you paid and the actual price of the phone. Did you actually think you were getting a phone that is worth $650 for only $200?

 

[mnsportsgeek]

Will ATT Share Plan Reduce Number of People Upgrading? (just keeping old phone)

Ya, I'm not really sure why the carriers decided to make everyone aware how much their phones cost.

Personally, I don't care. An iPhone has always been an $80-$100 per month investment, but why make it so complex with all this Next/contract/off-contract BS?

I don't know why they are juggling Next and 2 year agreements at the same time. It's just stupid to me.

 

[nostresshere]

This is where you are confused. You have always had to pay for the phone. You just paid a hidden amount inside your telephone bill over two years to make up the difference between the upfront cost you paid and the actual price of the phone. Did you actually think you were getting a phone that is worth $650 for only $200?

I am not confused. Of course I paid for the phone.

Maybe I can not type well.

What I am saying, now that people have to actually PAY for that new phone (instead of being hidden), like the example above, will many say "Not now"?

Yes, we still pay just like in the past, but it broken out which changes the decision process.

 

[rman0726]

This is where you are confused. You have always had to pay for the phone. You just paid a hidden amount inside your telephone bill over two years to make up the difference between the upfront cost you paid and the actual price of the phone. Did you actually think you were getting a phone that is worth $650 for only $200?

I don't think he's confused about that. I think he's completely aware of that. He's just stating that it feels different now. Even though it is costing the same amount of money as it always has, it feels different shelling out $650 vice $200.

It may cost you $2000 to have your old phone for $200 + contract for two years. And it may cost $2000 for two years to get a new phone at $650 + contract with a $25 discount. But when you see the $650 in front of you, it's a bit harder to justify.

 

[lordofthereef]

Did ATT (and others) shoot themselves in the foot?

No. The Next plan is contract free. AT&T never made money off of you buying devices. They make their money off of keeping you as their customer. With Next, AT&T profits off of your first bill. With subsidy, they profit after they have absorbed the extra subsidy cost.

 

[martiansoldier]

Do people on the Next Plan understand that after the 12 or 18 months when they are ready to upgrade, they have to turn in their current phones? Basically, they are leasing the phone from AT&T, whereas with the 2 year contract, you pay a bit more on your monthly bill, get a phone for about $200.00 and after the 2 year contract is up, you can turnaround and sell the phone for at least $200.00, which will pay for the next upgrade with a 2 year contract.

 

[AZhappyjack]

Early this year, I had 4 iphones and was paying about $230 per month. I also paid extra for ipad cell service.

Switched to Share plan and it is now $160 per month.

Under the old plan, I could just pay $100-$200 for a new upgraded phone and my monthly charge would not change. Happy camper getting upgrades on a regular basis.

Now, I am saving lots of money and have more shared data plus tethering. BUT - if I want a new phone I will have to shell out $750 (32mb) or pay the NEXT payment. Either way, I now see how much it will cost. Even though it is less than the old way, it is REAL MONEY.

How many people will look at this and say - No thanks, I will keep my current phone for another year?

Did ATT (and others) shoot themselves in the foot?

Um, it was always real money. You just didn’t see how much you were paying. And you actually paid extra if you did not upgrade immediately after when a line became eligible - because a portion of your monthly charge was for AT&T to recoup the subsidy - even when you didn’t have a subsidy purchase in process.

 

[Deguello]

Do people on the Next Plan understand that after the 12 or 18 months when they are ready to upgrade, they have to turn in their current phones? Basically, they are leasing the phone from AT&T, whereas with the 2 year contract, you pay a bit more on your monthly bill, get a phone for about $200.00 and after the 2 year contract is up, you can turnaround and sell the phone for at least $200.00, which will pay for the next upgrade with a 2 year contract.

Do you understand that you aren't forced to upgrade after 12/18 months, that even if you do you don't have to turn in your phone, and that during that two-year contract period, one could be saving 24 x $25 per month ($600) that could go toward paying off the old phone or buying a new one when the time comes?

 

[aristobrat]

UNDER NEW SHARED PLAN: If I want to upgrade, I have to shell out serious money. the 2 year cost might be the same, but not one has to actually pay for the phone. It makes one think twice.

I don't think most people are going to see the NEXT monthly payment of $28 (or $32) as "serious money".

What I think many consider "serious money" is the $199/$299/$399 + sales tax that's required to be paid up-front when upgrading at the end of a 2-year contract.

And "real serious money" is the $649/$749/$849 + sales tax that folks pay up-front for upgrading mid-contract.

Not to mention that stupid $40 "upgrade fee" AT&T tacks on the next bill for folks on 2-year contracts.

 

[nostresshere]

Do people on the Next Plan understand that after the 12 or 18 months when they are ready to upgrade, they have to turn in their current phones? Basically, they are leasing the phone from AT&T, whereas with the 2 year contract, you pay a bit more on your monthly bill, get a phone for about $200.00 and after the 2 year contract is up, you can turnaround and sell the phone for at least $200.00, which will pay for the next upgrade with a 2 year contract.

Bad information continues to flow.

You can pay off that phone and keep it, sell it, etc. You only turn in that phone if you want to get the next awesome phone. Under the old contract,you had to wait two years to get another phone.

Just another way to skin the cat.

 

[ToroidalZeus]

No, I don't think AT&T shot themselves in the foot.

AT&T created the Next plan to SAVE THEMSELVES money; read that again, it WASN'T to save YOU money.

Carriers subsidized cell phones to increase adopt rates knowing full-well they'd recoup the cost on lifetime carrier fees. Now that everyone has a smartphone, they don't have a reason to keep taking a hit on the subsidized priced; they are fully happy if you don't upgrade, if you stay with your current phone, because you are still paying them for service.

 

[1981d]

Since the phone plans used to be the same price whether the phone was paid off or not, you really were getting a $650 phone for $200. As I understand it, not too long ago if you bought an iPhone for full retail, it was just for the privilege of being off contract. Since everybody was paying the "subsidized" rates for service, you basically saved ~$400 by going the contract route, IIRC.

Now, that calculus has changed. In the past, keeping your phone meant that you were paying ATT (or whoever) the cost of an upgrade whether you upgraded or not, so most people decided to upgrade. Now that keeping your phone can result in lower monthly payments, more people may choose to forego upgrading for longer periods of time. I think that was the OP's point.

So the question becomes, what is more profitable for the wireless companies? To keep the most people on higher contract rates that take longer to pay the company back, or to encourage people to keep their phones or buy them outright and make profit sooner on non subsidized rate plans?

Based on the aggressiveness of the companies in pushing their next/edge type palms, I think they have decided that subsidizing phones is a long term looser for them. Whether that's true or not, we shall see.

 

[nostresshere]

On the old way, I paid $240 a month for 4 phones. I could upgrade every two years for $200 +/-. If I did not upgrade, I kept paying the higher price for service anyways. ATT was actually happy if I did not upgrade. There are millions still on Iphone 3 and 4 - paying the higher rate even though the phone is "paid off".

Earlier this year I got smart (I think) and went to $160 a month for 4 phones, 10gb, plus tethering. And no overage on the phone that had a 2gb plan.

Under the old plan, I could upgrade easily without thinking through the cost. Sure, any half wit could figure out they were subsiding my phone - but who cared? I just kept paying the bill every month.

Under the new plan, I have to think about raising my monthly rate or buying outright. I have to THINK,and that hurts by head and my pocket book.

 

[aristobrat]

Under the new plan, I have to think about raising my monthly rate or buying outright. I have to THINK,and that hurts by head and my pocket book.

I can't speak for your head, or how you run your pocketbook, but I still think that for most people, the NEXT method of upgrading hurts the pocket book less, because it doesn't require dropping an up-front $199/$299/$399 per phone.

... and since there isn't that big up-front hit, I think more folks will upgrade than usual.

 

[rui no onna]

More than AT&T, phone manufacturers are more likely to be affected by this change. So far, the new Mobile Share Value plans seem to have been pretty good for AT&T as it has attracted customers from Verizon and T-Mobile (or at least kept current subscribers from switching).

We still don't know how NEXT or EDGE will affect phone sales in the long run. For sure, there will be those who would keep their phones longer. However, there are bound to be customers who used to upgrade every 2 years that might now be inclined to upgrade yearly. For all we know, this could just end up being zero sum.

AT&T, Verizon, etc. primarily make money from service. The NEXT/EDGE model lets them do that right from the get go.