Comparing the New Frequent Device Upgrade Programs from U.S. Carriers

Earlier today, Verizon became the third major U.S. iPhone carrier to announce a program designed to allow customers to upgrade their handsets more frequently. Verizon's "Edge" program, which launches August 25, will join AT&T's "Next" program introduced earlier this week and T-Mobile's "Jump" offering announced last week.

While the new frequent upgrade plans may seem appealing to some users, The Verge earlier this week highlighted how AT&T's Next program is actually a poor deal for most customers.

Through the program, customers end up double paying for their devices through both the new monthly handset payments and the portion of the monthly service charge that has traditionally been collected by the carrier to recoup its upfront handset subsidies. Assuming that $20 of AT&T's monthly service fees go toward recouping the carrier's handset subsidy, a customer looking to upgrade after 12 months would have paid $390 in device payments on a 16 GB iPhone 5 and $240 from monthly service fees, yielding total payments of $630 for the $650 device, although they also have to turn in the device to AT&T.

Verizon's Edge program appears to work in a similar manner, although perhaps with a slightly better deal than at AT&T. Splitting the $650 iPhone cost over 24 months yields monthly payments of just over $27, and thus a customer looking to upgrade after 12 months would have paid $325 in device payments and $240 from monthly service fees, making for total payments of $565 plus the device trade-in.

early_upgrade_plan_comparison

Device payments for a 16 GB iPhone 5 owner upgrading after 12 months

T-Mobile has addressed this issue by completely decoupling handset purchases from service charges, creating lower monthly service fees while moving the device costs into a separate no-interest financing plan. Under T-Mobile's Jump plan, a customer purchasing a 16 GB iPhone 5 with a retail price of $650 and then looking to upgrade after a year would pay the $146 down payment plus $252 in monthly device payments plus $120 in Jump program charges, making for total payments of $518 plus the device trade-in.

In all cases, customers would seem to be able to save some money by purchasing a contract-free phone upfront for $650 and then reselling it on their own terms whenever they wish to upgrade, almost certainly saving hundreds of dollars in the process. Customers looking to upgrade more frequently than once per year may do somewhat better, but still likely not better than simply purchasing a unsubsidized device directly.

Top Rated Comments

(View all)
Avatar
91 months ago
These programs make me want to Jump off the Next Edge I come to...
Score: 17 Votes (Like | Disagree)
Avatar
91 months ago
Jump also includes insurance, which isn't mentioned here.
Score: 10 Votes (Like | Disagree)
Avatar
91 months ago
Does either AT&T or Verizon offer an "off contract" price that is $20 cheaper if you bring them an unlocked phone? I don't see them advertising cheaper rates.

If they don't, then this chart makes no sense because there is no option to "save" the $240 cost that they are assuming in the chart.

Also this must be analyzed based on the expected resale value of the phone. I'm confident about resale value for an iPhone 5, but much less so for a GS4 or an HTC One. The right to put either of those android phones back to the carrier at the end of the year for a new phone might be very valuable.
Score: 9 Votes (Like | Disagree)
Avatar
91 months ago
This post fails to recognize that even if you pay full retail of $650 for a new iPhone, you STILL are paying the inflated $20/month in service charges for a subsidy that never happened. So you must tack on the $240 "Device portion of monthly fees" which makes buying outright more like $890.

While you can then sell your phone after 12 months, you still take a hit on the depreciated value of the old phone. Say you sell it for $350 on Craigslist, your net cost is $540 for the year. So when you look at it this way, the Next program isn't as bad as it seems. Remember, you are paying a bit for the convenience to finance the phone interest free and the ability to upgrade at $0/down without having to worry about selling your old phone. Convenience has a price people. It's up to you.
Score: 6 Votes (Like | Disagree)
Avatar
91 months ago
What a ripoff. So now instead of paying $199 for phone and having a contract that includes paying off your phone built into the montly bill, you now pay an additional $27 a month for the phone without your actual phone bill being cut $27. Wow, a double bonus for AT&T and Verizon.
Score: 6 Votes (Like | Disagree)
Avatar
91 months ago
Tmobile way to go!
Score: 6 Votes (Like | Disagree)

Top Stories

Hands On With iPhone 12 Models Showing New Sizes and Design

Monday July 6, 2020 2:04 pm PDT by
Ahead of the launch of new iPhones we often see dummy models created based on leaked schematics and specifications, with those models designed to let case makers create cases for the new devices ahead of their release. We got our hands on a set of dummy models that represent the iPhone 12 lineup, giving us our first close look at the iPhone 4-style design and the different size options. Subscri ...

Everything New in iOS 14 Beta 2: New Calendar Icon, Files Widget and More

Tuesday July 7, 2020 11:38 am PDT by
Apple today released the second beta of iOS 14 to developers for testing purposes, tweaking and refining some of the features that are coming in the update. Below, we've rounded up all of the changes that we found in the second beta. - Calendar icon - There's a new Calendar app icon in iOS 14 beta 2, with the day of the week abbreviated rather than spelled out. - Clock icon - The clock...

iPhone 12 Sizes Compared with iPhone SE, 7, 8, SE 2, X, 11, 11 Pro and 11 Pro Max [Update]

Tuesday July 7, 2020 6:49 pm PDT by
Apple is planning on launching the iPhone 12 this fall which is rumored to be coming in 3 different sizes: 5.4", 6.1" and 6.7". The middle size (6.1") matches up with the currently shipping iPhone 11, but the other two sizes will be entirely new. Over the weekend, there was some excitement about how well the new 5.4" iPhone 12 compares to the original iPhone SE. Those who have been hoping...

Tom Hanks Discusses 'Heartbreaking' Shift of WWII Film Greyhound From Theatrical Blockbuster to Apple TV+ Exclusive

Monday July 6, 2020 7:53 am PDT by
Tom Hanks' WWII drama "Greyhound" is set to premiere on Apple TV+ this Friday, July 10, and ahead of that debut the actor gave an interview with The Guardian discussing the film. "Greyhound" was originally planned to see a theatrical release this summer, and was repeatedly delayed in the wake of the ongoing Covid-19 pandemic. Apple won the streaming rights to the film, and in the new...

Developer's Visual Comparison of macOS Catalina and Big Sur Offers Closer Look at Apple's UI Redesign for Macs

Tuesday July 7, 2020 4:00 am PDT by
macOS 11 Big Sur is the next major release of Apple's operating system for Mac, and following its preview at WWDC, one of the biggest discussions has revolved around the all-new user interface redesign. Developers are still learning what the impact the new UI will have on their apps, and with that in mind, app designer Andrew Denty has compiled an extensive visual comparison of the user...

5.4-Inch iPhone 12 Model Size Compared to Original iPhone SE and iPhone 7

Saturday July 4, 2020 9:44 pm PDT by
iPhone 12 dummy models based on leaked schematics have been starting to circulate online and in online marketplaces. Not happy with the circulating size comparisons between the rumored 5.4" iPhone 12 and the original iPhone SE models, MacRumors forum user iZac took matters into his own hands and purchased his own 5.4" dummy model to provide more detailed size comparisons between the original...

Shipping Estimates for 27-Inch iMac Continue to Slip, Now Into September

Monday July 6, 2020 6:55 am PDT by
Amid rumors and hints of a forthcoming update for the iMac, supplies of Apple's current 27-inch iMac continue to dwindle with mid- and high-end stock configurations now seeing shipping estimates pushed back into September. The 27-inch iMac has seen tight supplies and extended shipping estimates for months now, but the situation has been gradually worsening to the point where new buyers can...

Apple Cuts iPhone Trade-In Values as iPhone 12 Launch Nears

Tuesday July 7, 2020 7:46 am PDT by
With just two months to go until the usual timeframe for Apple's iPhone launch events, Apple is cutting back on maximum trade-in values of previous-generation iPhones for those looking to upgrade to a new model. Maximum values on more recent models have dropped by $30–$50, while older models have generally dropped by $5–$20 with a few models seeing no change in value.iPhone XS Max: $500 to...

Analyst Believes iPhone 12 Pricing Will Start $50 Higher Even Without EarPods or Charger in Box

Wednesday July 8, 2020 9:35 am PDT by
Despite multiple reports indicating that Apple will not include EarPods or a wall charger with iPhone 12 models this year, one analyst believes that pricing will still increase slightly compared to the iPhone 11 lineup. In a research note provided to MacRumors, analyst Jeff Pu forecasted that iPhone 12 pricing will start at $749 for a new 5.4-inch model, an increase of $50 over the base...

14-Inch MacBook Pro With Mini-LED Display Expected to Enter Production in 2021

Wednesday July 8, 2020 7:51 am PDT by
Apple suppliers will begin competing to win manufacturing orders for new 14-inch and 16-inch MacBook Pro models with Mini-LED displays in the first quarter of 2021, according to Taiwanese research firm TrendForce. Rumors of a 14-inch MacBook Pro have surfaced since Apple replaced the 15-inch MacBook Pro with a new 16-inch model last year. Apple analyst Ming-Chi Kuo has previously said that...