Apple today has informed employees of significant changes to how iPhones are sold via AT&T and Verizon Wireless, according to sources. As we reported last month, Apple has indicated that iPhones sold via AT&T at both physical Apple Retail Stores and on the Apple Online Store will move exclusively to Next financing plans this month, in June. This means that a customer who wants to buy a new iPhone on AT&T will no longer be able to do so on a subsidy…
The AT&T Next program allows customers to purchase an iPhone and pay for the price of the hardware over a several month period (20, 24, or 30 installments) and upgrade to new hardware earlier than before (after 12, 18, or 24 installments). While this change is occurring for standard iPhone purchases, we are told that two year subsidies through AT&T will remain for business purchases through Apple. Customers transitioning to Next will be able to keep unlimited data plans.
For Verizon customers, those who now purchase an iPhone via the Edge program will no longer be eligible for the connected Edge Up feature. With Edge Up, customers became eligible for early hardware upgrades after 18 months, but with this feature going away, this will move back to the standard 24 months for the standard Edge program. After the iPhone becomes completely paid off, the customer can also keep the hardware. Lastly, we are told that Verizon is planning to match AT&T and drop two-year contract subsidy programs as soon as the end of the summer.
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As someone who purchases unlocked, non-subsidized phones – this is a yawn. I refuse to be locked to a 2 year AT&T contract and their incredibly consumer unfriendly policies.
I’ll pay for the freedom to do what I want and screw AT&T!
YMMV
Corporate discounts on 2 year contracts with subsidies discount phones. Corporate discounts wouldn’t apply to Next or Edge payment plans.
Yeah, corporate discounts do apply to Next. I’m on AT&T Next and I get discount.
Last time I checked, the installment plans for the phone aren’t discounted.
Comments like this have always been a huge WTF to me. You don’t want to be locked in, so that you can switch away from AT&T whenever you feel like it. Well, if you anticipate feeling like it, why don’t you switch right now and why are you even still an AT&T customer? I mean, … the only other interpretation I can think of is that you like to switch between companies every few months to maximize… something or other… ?? Please explain if you don’t mind, this is a serious question.
I like to have the freedom to say FU when a company decides to behave in a manner in which they shouldn’t. If T-Mobile messes up and refuses to fix the issue, I move to whomever. Last month the people at Bright House decided to treat me as if I didn’t have a choice but to be with them… well, my house also receives Comcast. I own my own modem and router so there was zero re-configuration required. I never want to be in a position where I’m stuck with a company.
An unlocked phone also lets you swap to a local SIM when travelling abroad. Roaming costs can be financially crippling if you spend a week abroad and want to use data.
This is a bummer. I love the 2 year contracts only because I’ve been on AT&T for so long I might as well take advantage of it. I don’t find the price differences for family plans between the major carriers to be that significant enough for me to switch anyway. Plus, the resale value of iPhones (which I generally get) is so good, every 2 years when I’m due for a new 2-year contract, I just sell my phone and I always get back enough for the subsidy and activation fee of the newest model.
So what is the difference between Next and a ‘Subsidy’? Either way you’re still paying off the phone over time. I’m paying a bit more each month but that’s because I signed up for a 12 month plan.
As I understand it, once you’ve paid off the phone, that part of your bill goes away and you only pay for the data & phone service portion going forward. The old way, you kept paying the subsidy amount as long as you kept the phone.
But, correct me if I’m wrong, ATT/Verizon haven’t lowered their monthly plans have they? Its 70/month with or without the subsidy. With this new Edge program, that will push the price up to 90/month or whatever.
They’re getting rid of subsidies. They’re not lowering their monthly plans due to lack of subsidies. They’re just going to make more money.
If I’m wrong, please let me know. But to me, this just seems like another bullshit anti-consumer move from these monopsonists. If this prevents me from purchasing a new iPhone for full price no-contract, I’m going to strongly consider switching to TMobile. Every year I have always sold my current iPhone usually for around $450 a month before September, and then purchased the new one full price. If I’m forced into this monthly payment plan bullshit and being dictated when I can purchase a new phone, that will be it for me.
This may be the new way of doing things but how many people keep a phone longer than 2 years? So you’re stuck making payments on phones for life. Unless you decide to keep your phone for 3 years or more, and good luck making a smartphone last that long. Even if you keep it in a case your battery will deteriorate and your software will become obsolete.
@AMillah thats not correct. AT&T gives you a monthly bill credit for every line that is on a Next plan.
In reply to @AMillah,
They do discount your data bill if you do the edge/next plans. So instead of paying 40/month “Smartphone fees”, you are paying anywhere from 15-25/mo for each phone on the financing program.
Depending on the phone it balances out, or you’re paying an extra 5-10/mo for the phone.
Also once you pay off the price of the phone, you keep that discount plan (At least on ATT) so if you opt to keep your phone, you end up paying less per month than if you did a 2/year contract and kept your phone.
There’s a lot of misconceptions about the monthly pricing – you never end up paying MORE for the phone than it’s actual worth. People have just assumed that the 199/299 subsidized prices are the REAL prices of phones when really those were steep discounts offered for locking you into a 2 year contract that includes a 40/mo fee for HAVING a smartphone
Subsidy is paying the discounted retail price. With the Next, you’re paying the full retail price. Depending on your plan, you pay more for service when you choose subsidy, and less for service when you chose Next
So this is why AT&T doesn’t always throttle at 5GB now?
With a 2 year contract you pay $200 for a 16 GB iPhone and it’s yours. The only catch is that you can’t upgrade until after two years. With the Next plan if you decide to upgrade after 12 months you have paid $264 ($22 x 12 months), which is MORE than the $2 year contract price AND you have to give the phone back to get a new one. If you decide you want to keep the phone, then you will have paid almost the entire full retail price as opposed to just paying $200 for a contract. Next is a scam made to make people think they are benefiting from upgrading early, when in reality they are paying much more. I enjoy keeping my phones for 2 years because I know I can sell them for much more than I paid for them, which not only pays for my upgrade, but makes me money as well. I haven’t paid for an iPhone since the very first one.
It’s only a scam if you think paying full price for a phone is a scam. Carrier financing programs are actually decent if you don’t want to get locked in / pay 40/mo smartphone tax, or have a grandfathered plan (I have unlimited on Verizon) that you don’t want to lose but can’t afford to pay for an unlocked phone up front.
I disagree with getting rid of 2/yr subsidies. I think options are important and for people who are happy with their service, 2/yr contracts make a lot of sense for them. But financing is not a scam. We’ve just gotten so used to paying subsidized prices that we scoff at the idea of paying full-prize for them, even if it’s over time
“Customers transitioning to Next will be able to keep unlimited data plans” how does this work exactly? I still have the unlimited plan. The next plans seem heavily centered around data. Forgive me but I haven’t changed my plan since the beginning. Can someone illuminate this for me a little bit? thanks!
The Next program doesn’t have anything to do with your data. It’s a different way of buying a phone. With the Next program, you’re paying the full retail value of the phone over the course of 20,24, or 30 months, depending on your choice. Since you’re on the older plan with unlimited data, it’s just taking the retail and adding it to on top of what you’re paying right now. However, if you change your plan to one of the new Mobile Share plans, you’d lose your unlimited data, but they’d give you a discount on the bill for doing the Next program.
freediverx, long story short, you’re not paying $200 for an iPhone anymore. Youre paying $650. Depending on which iPhone you get ofcourse. That $650 they’re just going to put it on your bill and give you some time to pay it. Your other option is paying the $650 upfront and not putting it on the bill.
Freediverx –
If you DO NOT change your monthly plan but opt to finance a phone, you will be paying an extra 20-40/mo to pay off your new phone, depending on installment agreement and model. So it would be more per month – but you wouldn’t have to pay the full price up front if you couldn’t afford it. You can also opt to put a down payment to lower the monthly cost at purchase, or pay off the remainder of the phone at any time. In these cases you would OWN the phone after paying it off.
Depending on the agreement, you can also pay off a percentage of the phone and after a certain amount of time trade it in for a new one without paying the FULL price. SO you can upgrade your phone more often. In this case you do not own the phone – you give it back to the carrier after paying anywhere from 50-75% of it’s full retail price.
After you finish paying off your phone, you will no longer be charged for it, and your bill will go back down to what it is currently.
If you were to finance a phone and change to a modern data plan, you would be paying that 20-40/mo for the phone but also get a discount of 15/25/mo off your plan. The monthly discounts for financing a phone ONLY apply to their new mobile share plans, not grandfathered unlimited plans.
I upgraded to the 6 on the Next plan in November and was able to keep my grandfathered Data plan. At that time, they told me they tried to convince me to move to a tiered data plan, but it seems that now they will be backing out of that push. When you move into the Next program, you are given the option to keep your old plan or changed into one of the tiered plans. I chose to keep mine. I’m perfectly happy with my plan!
It Means your unlimited plan of $xx.xx used to include not only the unlimited (but throttled)data, but also accounted for the subsidization behind you getting an $650 for $199.99. As of june first, you are paying the same rate but now for just the data and no longer phone subsidization. So, the next time you go to upgrade, your bill will go up by exactly 1/24th of the retail price of the phone you’re looking at
@Freediver, for those on tiered data plans, AT&T offers a $15 or $25/month discount. However, they want to force people off unlimited plans, so they don’t offer discounts for unlimited plans.
If my payment used to include service + subsidy but now the subsidy is removed, my monthly bill should go down if I pay for the phone outright, but it’s not going to, right? So, basically, this is AT&T’s way to gouge their customers even more. Essentially, they’re removing the subsidy and keeping the rate the same.
“This means that a customer who wants to buy a new iPhone on AT&T will no longer be able to do so on a subsidy…” from Apple. You can still get the subsidy if you buy from AT&T, right? I thought I understood, but your article confused me.
Yup through AT&Ts website
Negative. Not online or at the stores.
AT&T quietly dropped the personal subsidy plans when the iPhone 6 came out.
It’s also a price hike, since the subsidy you used to get is built into the monthly fee you’re already paying.
With AT&T, for each line that doesn’t have a subsidy, you get $15 off.
If you have the Mobile Share plan ofcourse.
“With AT&T, for each line that doesn’t have a subsidy, you get $15 off.”
Why do they need to give me $15 “off”? Why can’t the bill just be $15 cheaper at face value? This to me implies that the $15 “discount” could go away and bring the plan price back up to the subsidized plan pricing in the future.
I have a feeling I’m going to just end up paying $450 more per phone per 2 year period by buying unlocked retail prices :( to keep unlimited.
And a $30 a month extra for the phone too
Only with old plans. New plans account for lack of subsidy with $15 or $25 off per line
This. Exactly. And no one’s said that yet. This is completely a price hike, and BIG one at that. I’ve got the unlimited plan, so I have to keep paying the exact same amount I’m paying now PLUS full price for the phone. Nice way for AT&T to reward their long term customers, huh?
So without subsidies why would you want to buy a phone loaded with bloatware from a carrier? No bloatware on iphones of course, but it would still be locked to that carrier too. Why not just buy an unlocked device direct from the manufacturer?
Because you still have the opportunity to take part in AT&T’s Next program. Whether or not you take advantage of the early trade-in feature, Next is a good deal because it’s basically an interest-free loan.
I see this as a punishment to people who have old plans.. When the new iPhone comes we can’t pre-order from Apple and wait couple months when its available with AT&T. I don’t see AT&T Next plan any cheaper or better on top of that you get to buy the phone at higher price.
WHAT. That sucks. Ugh. You do not own the phone on the next plan. Why the hell would I pay, in the end, the price of a phone over x amount of months to NOT own the thing. Disgusting. I’m furious.
Not true:
https://m.att.com/shopmobile/wireless/modals/next-faqs.html
Seems like there’s a lot of confusion here.
-If you are currently on a mobile share plan (you have X lines and share a pool of data with other users), this does not impact you. As it stands if you did a 2-year upgrade and your plan is less than 10 GB/month, you would see an additional charge of $15/month added to your bill. If you have 10 GB or more, that increase would be $25/month. Essentially, they are making back the money on the subsidy they’re offering you on the phone. If you do the NEXT plan however, you would not be subject to this extra cost, and would instead only pay for the hardware. 9 times out of 10, the NEXT plan is a financially better bet than a 2 year upgrade IF you are on a mobile share plan.
-If you are currently on unlimited data or a grandfathered “family talk” plan, a 2-year upgrade previously would not impact your plan in any way. You would get to keep the benefit of your grandfathered plan AND enjoy the benefit of a subsidized iPhone. THIS IS CHANGING. Going forward you will only be able to do a 2-year upgrade at AT&T stores. If you do a NEXT upgrade at an Apple store or best buy or whatever, you are now PAYING FULL PRICE FOR YOUR PHONE, just in installments. So, for people who have grandfathered plans and want to keep their unlimited data, you will need to do your upgrades at a corporate store, or you’re basically losing the benefit of the subsidized price.
That’s the long and short of it.
In other words you are getting screwed.
9to5mac is saying the two year upgrade at AT&T stores is for ‘business’ customers. Is this correct?
AT&T just keeps making it worse and worse. Just spent 2 hrs trying to figure out if keeping our old Family Unlim Data plan makes more sense than switching to a Mobile Shared plan and doing BYOB with our iPhones.
Seems to me, our grandfathered Family Plan still makes the most sense. Especially b/c we have two additional lines of dumb-phones, for other family members, and can use their upgrades every year.
What I still don’t understand, is will I be able to preorder the iPhone on day 1 through AT&T’s website next year? I understand that I can no longer buy directly from Apple, but what about AT&T? And what about buying/preordering specifically from their website?
Also, how do you know if you’re on a business/corporate plan? My wife gets a percentage discount because of her employer; does that mean we’re on a business/corp plan? Does that change anything in terms of when/where we can buy new phones?
Pricing out Cricket and Tmo really makes me wonder why I’m continuously willing to jump through all these hoops with AT&T!
At least AT&T kind of removed throttling on unlimited plans.
I’ve had every single iPhone since the first one in 2007. Aside from my first initial purchase back in 07 i’ve NEVER paid for another phone since. I’ve ALWAYS sold my old iPhone for more than the subsidized cost of the new one.
I’ve luckily always had an upgrade available (my mother has several lines). I have a 1 line account with unlimited data. AT&T Next makes NO sense for me!!!!! It’s a total rip off.
I’m going to pay a monthly “rental fee” for a phone and hand it back in a year later for another, and continue paying another rental fee for something I will never own (I don’t keep a phone longer than a year).
I wouldn’t receive any discounts since I would not let go of my unlimited data.
I personally think this AT&T Next is a total rip off. I’ve overheard the sales people brainwashing people into how great of a deal it is and for some people it might be a good deal.
BUT You don’t even own your phone! If you plan to upgrade every 12 months which is kind of the point you are just stuck renting a phone for the rest of your life.
I don’t know where people are getting the idea that you don’t own the phone on Next. See AT&T’s own FAQ:
https://m.att.com/shopmobile/wireless/modals/next-faqs.html
You only own the phone after you have made all the payments. Someone like me that upgrades yearly would have to trade my phone in every year.
You are required to trade the phone in if you want to upgrade after only 12 months, so you “own” it but you have to give it back. Trade in deals are usually shit deals. I have an iPhone worth $75 on the best trade in deal on the planet, meanwhile even though it is locked to AT&T it can easily get me $250 on eBay… think about it.
Exactly. AT&T asking you to trade your phone in is MASSIVE SCALE double dipping for the % of us out there that keep our phones in 100% factory mint condition through the life of the phone. iPhones made of glass and whatnot looking 100% new go for good money on eBay, USED and years old.
Next is only a rip off if u have the old unlimited data plans. Those plans were made for the 2 year contract. Am sorry to tell u buddy, most likely by the end of the year contracts will be gone and next will be the only option. Be happy that at let’s upgrade and get a phone and let’s you keep ur unlimited data. Verizon forces you to get rid of ur unlimited data if u upgrade.
So glad I just switched from Verizon to T-Mobile. Not only is the service faster, but I can upgrade as soon as I pay off 50% of the phone. The un-carrier thing isn’t just marketing fluff.
So why would apple store online or in store ever stock a phone other than an unlocked one? What benefit do the other SKUs really have other than having a sim already in them? If at the end of this Apple makes a split with the carriers I think it will be a good thing.
Im ok with AT&T not subsidizing my iPhone, assuming that they give me back the subsidy charges that part of my monthly bill. If at&t will lessen my service, then I want that $20 that we all already pay per line per month for the subsidy which is baked each of our bills.
If AT&T won’t do that, I’m happy to migrate my family to T-Mobile. It’s no problem at all. My friends down the street did it already. And they’re very happy with the smaller bills and great service.
Goodbye, AT&T. That 12 years of good will has officially dissolved.
So couldn’t I just get a new iPhone through AT&T and pay $200 up front? The article states this is when purchasing through Apple.
I wonder how badly AT&T dropping the subsidy on specifically Apple’s phones will hurt them… I swear to god at least 50% of iPhone users will frown and just change to Android to get a subsidized phone and avoid paying extra. You’d think Tim Cook would be up in arms getting dropped like that.
These plans are complete ripoffs, if anything, you end up paying more!
Has anyone done a cost analysis of the old subsidized vs. new plan and how much more in taxes and surcharges that users will pay over the length of the plan.
These comments are filled with people who have no idea how these plans work, or what they currently have. This is why you all have high phone bills because there is no knowledge of the differences.
If you have unlimited data you can keep it. You will have to do a next plan or buy the phone for full price or go to a corporate at&t store. How long will the at&t store be doing subsidy upgrades who knows. If you do keep your unlimited data just know you are paying as if you have a subsidy on the plan anyways, so basically each line is paying for two phones.
The unlimited data is a mind thing, many people have it and don’t need it.
As far as the cost for the next vs subsidy. It is a better option if you have a 10gb or more at&t plan to do next for the most part.
Removing the subsidy is a good thing. You are not paying anymore then you used to, its just that you see what the phone is actually worth because it separates the cost of the service from the phone itself. In a subsidy your phone was built into your plan, so everyone was still paying the 650$ for a phone. People will realize they are carrying around an expensive device and not think that it only costed them 200$.
I think the fact that people are so confused over the 2 year contacts vs. these new Edge and Next programs says that they need to clarify everything. Like I’d rather have the 2 year contact price but after the 2 years does the price on the bill go down since you’re not paying back the subsidy anymore? Ugg carriers need to get their crap together and makes everything clear. Carriers are so shady…
Just to let u you guys know I work for a corporate At&t store and in the Florida market, we no longer do the two year contract in store. Its either the next plan or full retail upfront. Att is still offer the contract through customer care but u can longer go in a store and buy a phone with the two year price. Pretty soon it will be nationwide
@mrjjay1201: question for you. What if we’re already on an old 2 year plan? Can we still go on with business as usual, i.e. when we’re “eligible for an upgrade” just extend our contract by an additional 2 years and get the typical $200 subsidized price on a smartphone?
No. No matter what your situation is. Starting June 1, 2015 u cannot do a new 2 year contract upgrade or extension of any kind in a att store. No matter what type of account u have even if u are grandfathered into any plan within the Florida market. U can still upgrade with the 2 year contract via customer service or att.com and they will ship u the phone. So far Florida is a test market for this but pretty soon it will be nationwide. And probably by the end of the year the contracts will be gone and any customer that has a older plan like the nation minute plans with unlimited data are going to be forced into next or pay full retail upfront. Subsides will end, its only a matter of time till its completely gone.
@mrjjay1201. So the upgrades on AT&T’s website (att.com) will at least continue? But you don’t know if they’ll continue say past the end of the year?
Hmm. Not sure what to do. I’ve been staying with AT&T primarily b/c we have 3, now 4, lines and can cross-upgrade pretty much whenever we want. I’ve done the math, and that scenario alone appears to make the most sense financially. If that goes away, so does any reason to stay with AT&T.
Unfortunately they haven’t told me when the contracts will officially end but they said most likely this year.they recently released next with down payment which is similar to t-mobile’s method in which u put a down payment to lower monthly cost but it adds up to samething as 0 down. Before we would only do the 2 year contract when a customer’s credit wasn’t that great but the down payment option has replaced the contract. Depending on the plan u have, next is actually a better option. Especially with the mobile share plans
@mrjjay1201: Thanks again for taking the time to respond. I don’t know how unique my situation is, but you clearly sound like you understand this stuff inside and out. We’ve got 4 lines on an old Family Talk 1400min plan. 2 lines are iPhones 6 with the old $30 unlim data (yes, I agree, we really don’t use it enough to stick to the unlimited), and 2 lines with just flip-phones with no features for our parents which is satisfactory to them.
It works for us, b/c we are able to upgrade our iPhones pretty much on a yearly basis if we wish, using the cross-upgrades from our two ‘parent’ accounts. Having set down and done the rough math, this seems to make the most financial sense to me; and we’ve been going along like this for years.
Although in theory I have no problem doing away with the whole 2 year contract thing, and I have no problem buying the phones for full price (I know how to sell them on ebay), BUT AT&T needs to make it fair for me. Switching to a 10GB/4 line no contract plan, only saves me about $25/month but I lose subsidized upgradeability of 4 lines; (6GB plan is even more expensive). How does that make any sense???
I’ve been researching switching to Cricket or Tmobile for the last few days!