Sprint Wants To Give You A New iPhone Every Year, But Whose Deal Is Best?

Posted in iPhone News by admin. Published October 25th, 2014

Sprint Wants To Give You A New iPhone Every Year, But Whose Deal Is Best?

When Apple launched the iPhone 6 last month, Sprint saw an opportunity to bring the Apple faithful over to the nation’s third-place carrier. Dubbed “iPhone for Line,” the new offering allowed customers to get Apple’s latest smartphone by making monthly payments while paying nothing up front. With Verizon and AT&T offering similar installment offerings, Sprint’s plan was in some ways less exciting than the marketing might have suggested. But now the carrier is back with an upgrade that allows you to get a new iPhone every year. While most people are well served by keeper their phones longer, if you’re one who always needs the latest and greatest model Sprint’s new deal is an intriguing option.

‘iMust have a new phone’

To best understand what Sprint is offering, it helps to remember that a new iPhone 6 in the smallest configuration (16GB) really costs $649. For years the carriers have been hiding that from you through the once-every-two-year $199 upgrade. But you’ve always been paying the higher price in the form of your monthly bill. This is easier than ever to see thanks to plans like AT&T Next and Verizon Edge where you can get a discount of up to $25 per line in return for passing up that discounted phone and instead paying for it a little bit each month ($27.08 on Verizon, for example, which your calculator will tell you is just a hair over $649 when multiplied by the 24 required payments).

With Sprint, you can bump that installment fee up to $30 and get a brand new iPhone every year. You will have to give back the old one — after all you’ve only paid $360 out of that $649 — and it needs to be in good condition. Sprint will also collect the sales tax associated with the purchase and, of course, you’ll be on the hook for whatever rate plan you choose.

Sprinting to the front?

Where it gets confusing is that each carrier has slightly different rules for precisely when and how you can take get a new phone, Apple or otherwise. Consider how the big four treat the situation. (All these examples use a 16GB iPhone 6, but you can get any memory configuration you want and, of course, the iPhone 6 Plus as well.)

Verizon Edge, $27.08 monthly, upgrade after 30 days so long as you pay 75% of the total owed

This plan is ridiculously flexible on timing in that you can literally upgrade every month. But doing so is pricey. After a year, you’d have to make a one-time payment of $162 and hand over your phone to get a new iPhone. When Verizon first offered Edge, you could trade-in devices with just 50% of the balance paid off and the deal looked very good; now it no longer does. If you can afford to just buy a phone at full price, you might as well pay the $649 and then trade in the iPhone a year later for what will typically be around $300. That “net cost” of $349 beats the $486 you’d pay on Edge for the same privilege.

Either way, Verizon will cut $25 off your monthly bill so long as you have a plan with 10GB or more of data each month. For families or other groups, this works great; for individuals, however, smaller plans only get a $15 per line discount. For that reason, if you have your own plan you should stick with a subsidized phone and take the $199 deal.

AT&T Next, $27.09 monthly to upgrade in 18 months, $32.50 to upgrade in 12

In some ways, AT&T offers the best of Sprint and Verizon here but in some ways it offers the worst. If you want a 12-month upgrade, you pay a bit more and you get it. AT&T does charge $32.50 while Sprint only asks $30 though. AT&T also offers a different Next plan, that slightly shortens the 2-year requirement with a Verizon Edge-like price of $27.09 and a chance to upgrade in 18 months. So you pay as much as you would with Edge, but you can’t accelerate faster than 18 months. That’s a weird option for most people given both Apple and competitors like Samsung tend to come out with new models at approximately the same time each year.

Perhaps the worst part of the AT&T deal is the need to choose early on. Verizon’s offering is more flexible. AT&T’s is cheaper if you’re sure you’ll upgrade in 12 months ($390 vs. that $486 on Verizon). Oh, and the same rules about discounts apply: $25 off with 10GB plans and $15 without. Families get the most from Next, individuals should stick with $199 phones.

T-Mobile, $27.08 monthly, upgrade whenever you want by paying off the phone

The Un-carrier gets this the most right of anyone. You’re buying the phone with the equivalent of a 0% interest credit card and T-Mobile will extend you this deal once per line. When you’re ready for another phone just pay off this one. You then own the phone and can trade it in or sell it yourself. Because T-Mobile doesn’t offer any subsidized phones anymore, there are no discounts on monthly plans — all plans are priced with the assumption you will either buy a phone outright or finance it this way.

In essence, T-Mobile is giving you the best of all worlds. You get a phone you will own and can dispose of in the way that’s most favorable to you at the time that’s most favorable to you. But unlike what you now almost have to do with Verizon, you can finance that phone over 24 months at no extra cost. The only catch is whether T-Mobile’s coverage and service will meet your needs. For many, it will.

The power of the iPhone

There has been endless speculation that the move away from subsidized phones was going to hurt Apple. It should be clear that so far, nothing could be further from the truth. Carriers are continuing to promote the iPhone as aggressively as ever and Apple’s share of the U.S. smartphone market has reached 42% even before the launch of the new larger-screen models. If anything, the early victim is Samsung whose flagship Galaxy S5 is nearly as expensive on an installment basis (right around $25 against $27 for the iPhone) but whose margins are already under pressure as its high-end sales slow.

Apple, meanwhile, reported 20% growth in iPhone sales last quarter when it had less than two weeks of results from the iPhone 6 to throw into the mix. Clearly carriers believe upgraders and the few latecomers to smartphones are still motivated by iPhone and are therefore tailoring offerings around it. Sprint’s latest plan, if it proves a success will have those Apple faithful in to pick up a new iPhone each and every year while competitors’ similar offerings try to do the same. Whichever carrier you choose, it seems Apple wins.

[Thanks: http://www.forbes.com]


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