“The big wireless carriers may have curbed their price wars over the summer, but thanks to Apple, they’re suddenly getting aggressive about iPhone prices,” Aaron Pressman reports for Yahoo Finance. “T-Mobile CEO John Legere took to his blog on Thursday to announce that customers could get an iPhone 6S on his company’s Jump on Demand upgrade program for only $20 a month. Sprint says its customers can pay as little as $15 per month for the new iPhone if they trade in their old phone (otherwise it’s $22 monthly). Both offers allow customers to trade in their 6S for next year’s new Apple model at no additional charge.”
“Those prices undercut AT&T and Verizon’s current monthly prices for iPhones, which generally start at $27 a month for two-year plans without upgrade rights, as well as Apple’s own brand new installment payment and upgrade plan offerings,” Pressman reports. “Of course, customers get to keep their old phones at the end of two years on those plans — the upgrade plans require that the old phones be returned to the carrier. There should be more news soon. AT&T is expected to come out with a new iPhone offer imminently, while Verizon has reportedly already been emailing some customers with early upgrade offers.”
“The carriers and Apple plan to resell all the used phones that customers on the upgrade plans trade in. And that complicates the equation a bit for consumers, since sales of all those used iPhones could depress prices in the future. That would hurt anyone who planned to recoup their investment in an iPhone, as well as the carriers and Apple.
“That’s a real risk at some point in future, because there’s an eventual ceiling on how mane people want to buy refurbed devices,” says Jan Dawson, chief analyst at Jackdaw Research. ‘This is a big potential future issue,'” Pressman reports. “Apple and the carriers might have to raise prices for the upgrade plans and cut back on promotions if they don’t recoup as much money as expected from sales of used iPhones. But until then, expect more deals as iPhone upgrade excitement grows to a fever pitch in coming weeks.”
Read more in the full article here.
MacDailyNews Take: The more competition, the better!
SEE ALSO:
Apple’s iPhone Upgrade Program expected to drive annual demand for new iPhones – September 10, 2015
Apple’s annual iPhone Upgrade Plan is a game-changer – September 10, 2015
Apple takes aim at the carriers with annual iPhone Upgrade Program – September 10, 2015
How Apple’s annual iPhone Upgrade Program works and how much it costs – September 9, 2015
Got’a love the free enterprise system!
Please, someone build an app that calculates all the variables by individual situations/needs and outputs best options.
No App needed, just abstain from buying anything since whatever you buy will always be superseded by something faster, shinier and more productive.
No investment lost and a great amount of satisfaction knowing all those silly people have wasted bucket loads of money on ‘new’ (read: soon to be outdated) tech 🙂 Reeeeeeesult ka-ching!
Don’t forget to move back into a cave 🙂
That advice doesn’t solve his problem, which is to figure out, in the sea of convoluted leasing, subsidy and interest-free loan plans, which option is the least expensive for the user.
Carriers are aggressively moving away from subsidy model (you pay small amount upfront, sign a two year contract and carrier recovers the rest of the phone value through your monthly plan charges).
This move created a new problem for the carriers. The actual price of the phone became very obvious, which reduced their ability to milk more money from the customers: when everyone clearly knows the exact price of wireless service vs. the phone itself, they can directly compare competing plans and services.
Their solution is these “unlimited upgrade” plans, involving various leasing options, which are designed with the primary goal of again obscuring the actual price of the phone, as well as allowing people to continue to pay for this special “upgrade” service even if they aren’t upgrading the phones.
Ultimately, the best deals will always be the ones where you only pay for the service and you buy the phone separately, either paying upfront, or on interest free loan.
True – as it relates to the financial side of purchasing an iPhone. However, there are many more variables that relate to individual needs or desires. Do you travel internationally? How much storage do I really need? Is speed or coverage more important? Do you call internationally if so to where? Etc.
The point remains: when the price of the phone and the price of the service are separated and clear, it is much easier to compare services and decide which one is the best one for you (taking into account all those factors, such as international roaming, network coverage and speed, domestic rates for overseas calling, etc).
And in general, these new options seem to be add-on services for existing wireless service plans. So, you choose what services you need with the carrier that works best for you, then you have the option to add on this ‘upgrade’ service.
In the end, it is still best to just pay your carrier for the service and buy your phone separately. This needn’t be too complicated; some carriers offer EIP (Equipment Installment Plan), an interest-free 24-month loan for the phone. It costs you literally nothing, and it allows you to spread the $650 (or higher) price of your phone across two years.
I had purchased my iPhone 5 this way; I had paid it off two years later. Half way through the loan, I had upgraded it to 5s (bought the new one for $650 cash, sold the old one for some $450), and kept paying off the old loan (T-Mobile didn’t care that I sold the old phone, as long as I continued paying the loan installments). I had finished paying off my loan last May, and have no loan. When 6S goes on sale later this month, I will buy it for $650, sell my old 5S for about $350 or so, and probably won’t even take out a new loan ($300 isn’t that much for a new phone). I will have the new iPhone and no loan for it.
The new 3D touch is the final reason for me to upgrade.
You know that if someone did that, a number of the cell phone service providers would sue ASAP. Gotta love the ‘free enterprise’ system?
I’m not sure those prices include service. If they do, Apple must have gotten some sort of bulk contract with the carriers.
They don’t (of course). Service charge depends on your chosen plan, but most start at about $50 on individual plans, or $80 for two on family plans.
The question is, is it better to take an interest free loan for the new phone, or rent it for $20 per month. With the rental, you can upgrade without hassle (simply trade old for new). With purchase, you must unlock, sell old one, but new one, pay off loan, take out new loan… The math will ultimately always work out in favour of buying (vs. renting).
Wait a second, wasn’t the iPhone “bad for carriers” because it was too expensive and every carrier who has it will be in doomed (even that in reality it was all the contrary)? And now all the carriers want to compete for it?
Dumb ANALysts and their pessimist predictions against apple.
You can get hundreds for your old iphone, but my girlfriend can only get $17 for her Android.
If your girlfriend is using an Android, what does that say about her? Even better question, what does it say about you? How much can you get on a trade-in on the girlfriend?
Do you think that $27 price actually includes service?