Let me upgrade you
Thats a good look
Better yet a hood look
Ladies that's a good look
Let’s say you’re someone with an AT&T iPhone 5 with a contract that means you can’t upgrade for any reason for another 16 or so months, but you want to upgrade to a 5s anyway. What are your options?
Well, the first option is to buy the iPhone at the slightly reduced price of $549.99 (for the 32GB model). That’s with another 2-year contract (and an activation fee, which $20-40). With taxes, we can call that $600, easily.
But, you’re thinking, you did just read in the news that T-Mobile is dying for new customers. They’ll not only pay your ETF (early termination fee) up to $350, but they’ll give credit for trading in your new phone. And, you can still get an unlimited data plan with T-Mobile. T-Mobile will give you $220 for your iPhone 5 and will want $99 up front for the 32 GB iPhone 5s, plus and installment fee over and above your service fee. The trade-in will cover the upfront portion of the new phone, but the total cost of the monthly plan will be higher than your cushy grandfathered AT&T unlimited plan. This includes the ability to “just upgrade my phone” every 6 months. Total cost difference over two year (versus doing nothing): about $720 (or if you subtract the left-over $119 from the iPhone trade-in, $601).
Wait, you say! I just read on Re/Code that AT&T is letting current contract customers join their AT&T Next program which is similar to T-Mobile’s JUMP plan, in that it charges for the device as a monthly installment instead of an upfront cost. For the low cost of an additional $30-50 on your monthly bill (for 20 months), you can get a new 32 GB iPhone 5s with no money upfront (except the taxes… oh fine print you minx). But what about your brilliant and no-longer available unlimited data plan? You can keep it! Total difference in cost: about $1020.
On the other hand, a new, unlocked iPhone 5s 32GB is $749 (+ tax).
The going rate for an AT&T 32GB iPhone 5 on Gazelle (and similar) is around $200, with many eBay auctions listed slightly higher, especially for unlocked phones. Assuming $200 recouped from selling your iPhone 5, the totals become:
- AT&T early upgrade: $400
- T-Mobile JUMP: $601
- AT&T Next: $820
- New unlocked: $590
I knew that AT&T Next was a bad deal (this has been pretty well documented), but I was surprised to see how the other options would play out over the course of the life of the phone. The cost premium for breaking the contract cycle is relatively small, with buying an unlocked phone (which would be used with the remainder of the contract) is barely $200 more than the early upgrade, which resets the contract term. Both JUMP and Next are non-contract plans, ostensibly, though the way the phone is paid in installments acts as a de facto contract, because the terms require payment in full if you cancel your service.
I’m not going to upgrade any time soon, but if I did have several hundred dollars to spend on this, it’s hard to see why just buying the damn phone wouldn’t be the best option all around.
Sam Davies pointed out over on ADN that AT&T has instituted a $15/month discount for customers who are off-contract or have an unsubsidized phone, but I confirmed with an AT&T sales rep that the discount only applies to the Mobile Share plans, which would mean giving up unlimited data.