The problem is that this is very expensive. An iPhone costs $650 and you get it for $200. That means that the carrier is eating $450. Even if you argue that a carrier is getting a discount and it's only costing them $300-350, they have to earn that back. $300-350 over 12 months is $25-29.17 per month that they have to earn back, plus interest. So, you have a $30 data plan, and only $0.83-$5 of that is going to actually implementing, maintaining, etc. the network. If they're subsidizing the device by $400, giving you an upgrade ever 12 months would mean taking a loss of $40 not including the cost of creating and maintaining the network.
So, it's quite detrimental to a company's bottom line to offer that to the point that it isn't wonderfully feasible. Sure, you can say that it gets you the voice plans of those people who switch and maybe that can go to the subsidy as well and whatnot, but the margins are thin. I'm quite literally paying $40/mo for my iPhone plan as an add-on to a family plan (plus 1/5th of $20 for texting ($4) and 1/5th of $70 for voice ($14)). So, I'm paying a total of $58 and getting a $450 discount on the device. $450 over 12 months is $37.50 plus interest and so I would only be paying $20.50 per month for my actual usage. Even if I bring my own phone, there isn't a carrier that would give me a price near that low.
Frankly, I think it would be better for uses to pay the $649 up-front and have cheaper plans (and this does happen in many countries and can happen here if you want to buy the iPhone 5 for T-Mobile). However, even there I wouldn't be getting such a value. T-Mobile offers 500 minutes plus texting plus 2GB of data for $50/mo. For $8 more on a family plan, I'm getting $450 off my device which even if I can only upgrade every 24 months is an $18.75/mo value.
It would definitely be a huge differentiator. AT&T did this for many years to keep Apple fans happy and to prevent their yelling from overwhelming the press around the new device. However, it's really expensive. Even if you gained more customers, it likely wouldn't be worth it.
So you pay the ETF and switch to Verizon. If you got the 4S last year, you're looking at $215 right now for an ETF vs $250 for the "early upgrade fee". Chances are, they want to retain you as a customer, so they'll waive the upgrade fee.
I certainly don't feel bad for AT&T, my average monthly bill is $130, so I'm paying them ~$1600 in monthlies per year plus the annual $200 (& change!) upgrade fee. So I don't think it's unreasonable to get a new $650 iPhone each year for the $2K I'm paying (which as you say probably only costs them $350).
I just wish they'd formalize this into a "Apple fanboi" plan so I don't have to threaten to cancel, argue with managers etc to get that shiny new phone on release day!
Full disclosure: I do sell the previous phone via eBay, so I guess I'm at least making the $200 upgrade fee back.
I'm dying to find out if, say, Cricket or Virgin's iPhone5 plans will be any better - I'm willing to buy up front.
Virgin's iPhone5 will likely remain a better value than any subscription option mentioned in the article. Unfortunately Sprint (and therefore Virgin) can't get close to Verizon's US 4G coverage.
- 4th column for StraighTalk as one of the carriers
- 5th column for Tmobile as one of the carriers)
- Cost to buy iphone (199 normally, but full price prepaid)
- Cost over the entire life of the plan
See:
- Tmobile: http://9to5mac.com/2012/09/10/t-mobile-unveils-its-big-plans...
- StraighTalk: http://9to5mac.com/2012/07/30/review-the-iphone-on-straight-...
Note: Since StraightTalk resells AT&T using their own antennas, the available service would be same. Correct?
Micro-SIMs cannot be cut down to nano-SIM dimensions and be used.
It's pretty sweet.
Does anyone have an idea what kind of internet pipes LTE base stations get, and how much bandwidth they can (realistically) provide to every phone once they are operating at planned capacity?
Currently I pay about $17/month but if I wanted unlimited everything I could get it for $32/month.
We don't pay to receive calls or texts however so there is little need to have "unlimited" either. Even the thought that I am paying for advertisers to send me junk text messages or calls would drive me insane, if I was in the US.
The US and Canada really have it rough with mobile and internet services...
Looking on here:
http://shop.o2.co.uk/mobile_phone/pay_monthly/24_months/Medi...
It looks like the cost is $70/month for unlimited text/voice and 1 GB of data. That doesn't seem much cheaper at all to me.
I visited Berlin in June. I prepaid 15 Eur for unlimited one week everything on Vodafone. I could have gotten prepaid everything for 30 Eur/month, but I was only there for a week.
And the 3G speeds I received were actually higher than the ones I usually get in NYC.
I put in my request yesterday, but it has yet to go through...
I'd like to switch (they're the only ones with LTE coverage in my city) but probably half of my calling is to/from/in Canada.
If you're going to Canada a lot, your best option would be the AT&T iPhone as the Verizon iPhone won't support Canadian LTE bands.
Right now I'm trying to decide between sticking with AT&T's Nationwide plus Canada and a global data add-on ($110/month) and Verizon's cheapest Sharing is Caring option plus a prepaid Virgin Mobile Canada plan (once VZW will unlock my SIM slot -- $105/month total).
With AT&T I only have one phone number and get free long distance calling to and from Canada (which I do a lot). But the closest LTE market is out of state, and I would need to use my old phone for overseas use with a local SIM.
With Verizon I get LTE in my hometown and much of the rest of the world, and I can use local SIMs when I travel, but I would need to use Skype or FaceTime to call people across the US/Canada border, and probably wouldn't get missed call or voicemail notifications until I crossed into each carrier's coverage area.
The AT&T option appeals to my practical side and the VZW option appeals to my hacker side. Anyway I'm traveling till October so I have a couple of weeks to decide.
From Verizon's perspective, if you pay their post-pay rates and bring your own iPhone, you're paying them an additional $18+/mo since they don't have to cover the subsidy. As such, if you have a grandfathered plan, they care less since you're basically paying for a higher rate plan by not using a subsidy.