Apple dumps AT&T subsidized iPhone options

“Only days after AT&T CEO Ralph de la Vega said subsidized phone prices are going away, Apple dropped the option for iPhones on the carrier’s network,” Jeff Gamet reports for The Mac Observer.

“Instead of offering iPhones on AT&T’s network with two-year contracts and subsidized prices,” Gamet reports, “Apple now only offers the AT&T Next plan which spreads the cost of a new iPhone over several months.”

“The Next plan lets AT&T customers get a new smartphone—in this case, an iPhone—without paying any money up front,” Gamet reports. “The cost of their new phone is spread out over 12, 18, or 24 months as part of their monthly bill, and can be traded in for a new phone once it’s paid off.”

Read more in the full article here.

MacDailyNews Note: So, now, Apple Online Store offers iPhones with 2-year contracts (via Verizon or Sprint), unlocked and contract-free (via T-Mobile), or with carrier financing (AT&T) which starts at $21.64/month for an iPhone 6.

47 Comments

    1. You do anyways..
      Whats the difference if its called subsidized or financed !
      You endup paying one way or the othere . Carriers dont give the phone to you as a gift …Never have .

      1. No not really. ATT never really had serious discount plan. It was the same price with or without a new phone.
        No reason to stick with anyone now. 😳

        1. AT&T “discount” was costing our family more than buying the iPhone outright … when the numbers were calculated over the ATT upgrade elgibility interval.

          We left AT&T at the earliest unlock opporunity, and haven’t looked back. We’re happy with $95 less each month with a better voice, data & message plan.

          Admittedly, the numbers for your situation may be different.

      2. Most people who live paycheque to paycheque don’t understand basic economics. Generally, they go for the Samsung BOGO promotions and end up paying more over the long term. You can’t teach trailer trash new tricks.

        1. Trailer trash? Only a profoundly ignorant person would use such a term without any provocation. The poor are royalty compared to a scum bucket like you.

      3. Because they won’t lower the cost for users on the subsidized plans. They will keep that, and tack on the payment plans. Instant $30+ per month profit. It’s a massive illegal price gouge. I almost think they **have** to offer old plans the incentive. I just don’t know.

        1. PRECISELY! If their prices were going to have the price of a the phone knocked off, and you bought the phone, fine. (Well, not ‘fine’, because prices here are ridiculous. But fine for here.) I don’t think they’ll drop the prices much, if at all.

        2. Pretty sure that isn’t true. You have to change your plan when you switch to the Next upgrade. AT&T made me pick a new plan that factored in the Next upgrades, LOWERING my monthly by $75. The two phones that were technically still under contract had the rest of their contracts waived and the one phone upgraded through Next is the only one I have to pay the fee on until I upgrade the other 2. Even when paying Next payment on those phones, my monthly will still be slightly lower than the contract plan was.

        3. My cell service price went down considerably when I switched to next. For the iPhone 6 Plus, I just bought the phone outright. I pay a lot less for the service than I did when the phone was subsidized. So they did indeed lower the price..

    2. So, you don’t have an iPhone or any other smartphone, then. If you do, then you were already paying $600. $200-300 upfront, then $300-400 over the next two years in a higher monthly service cost – usually around $15.

  1. Oh well it was a great deal at one point but on the 128 GB iPhone 6 Plus I was only saving $250 anyway, and since I was paying $10 a month just for the ability to upgrade twice in two years instead of once, I’m also saving $120 by closing that down, so this will cost me only $130 more a year. Guess my annual budget for iPhone just increased by $130.

    1. Wait, I was looking at the wrong model, subsidized pricing really was still a great deal, it’s still a $450 difference. So that’s just completely ridiculous. Back to my original thought of “Fuxk! Damnit”

    1. Nope. Factored in with activation you save $90 over 2 years on a contract for 10GB. I saved $100 a month on my family on this. Walk into apple or ATT and look at the actual totals. Next un-hides the hidden cost in your bill.

  2. The reason that this is a good deal is that the financing is Interest free financing. You just choose how many payments you want to make to pay on the retail price for phone. ATT actually eats the final few months of payments if you decide to upgrade and stay with ATT. It is not more expensive. I actually ended up saving money on data. The cost of the phone under the old plan was hidden. Here it is more transparent.

    1. No, it was not hidden, if you upgrade every (anywhere from 18 months to 24 months.) For us unlimited data plans, you bet your bottom dollar, we will not get a price cut for not having subsidized iPhones. Therefore it’s all extra cost.

      They are doing it to shed us who have unlimited data plans.

      So… if that’s the case, then they surely do not want my business.

      1. The unlimited plans that have proved to be limited when you are throttled? You’re probably paying too much now for “unlimited” for using an amount of data that would be cheaper just buying outright.

  3. Most people are completely ignorant about subsidised plans and pricing.

    An iPhone costs $650. That is its retail price. When you get an iPhone with a contract, you will end up paying your carrier $650 for it. In most cases, it will happen over 24 months.

    There are two major problems with subsidised plans:
    1. paying anywhere between $80 and 200 extra in taxes,
    2. donating free money to your carrier when you are “out of contract”, on “month-to-month”.

    Many, if not majority of people end up doing the second one; EVERYONE on a subsidised plan overpays the first one.

    When carrier bundles the price of your phone in your monthly plan, you pay your taxes based on your plan. Taxes for wireless services can go up to 20% in some states. The amount that you pay over 24 month for your phone is $450 (if you put $200 upfront). That means you paid some $90 in taxes on that phone.

    When you buy your phone separately, with an up-front payment (or an interest-free loan, like at T-Mobile), you pay regular retail tax on that phone, which is as low as 4% in some states. You only pay wireless tax (20%) on your actual wireless service (which is likely no more than $50). This amounts to about $35 for that $$650 phone. This means that you have donated over $50 to Uncle Sam.

    When your contract expires and you are on month-to-month, your carrier continues to charge you full monthly plan. $25 of that is subsidy for the phone you had already paid off. Now you are donating money to AT&T.

    Plans like T-Mobile (and this new AT&T) are the only ones where consumers aren’t donating free money to the government and their carrier. Currently, with T-Mobile, you get your iPhone “for free” (i.e. you get an interest-free 2-year loan with no downpayment). All you pay is retail tax for it (some $50, varies by state). Your plan is $50 (unlimited everything, 4G throttling beyond 2GB), your loan for the phone another $25. You can continue to pay your monthly installments for two years, you can pay off early (no penalty), and as soon as you pay it off, your monthly bill goes down by $25. You can unlock the phone right away, you can sell it, do anything with it, it’s completely yours, as long as you pay the installments regularly. Once you pay it off, you can get a new one if you wish.

  4. My understanding is that AT&T is the one who wanted to end subsidies with apple. That if you wanted the 2 year option you could only get that through purchasing the phone directly from AT&T. I seem to remember reading this a few days ago. Anyone else remember this?

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.