Apple's Upgrade Plan


Huffington post posted an article today called Apple Could Trap You Forever With Its New 'Upgrade Program'.

I believe their premise is flawed.

If you buy a phone on a traditional two year contract I'm going to save $450 upfront that the carrier subsidies. Yes, your $199 iPhone has ALWAYS cost $450 more. But the carriers pay that because they make MORE than that over the course of your two year contract. And if you keep your phone past that contract your monthly bill stays the same. So now you're paying for a subsidy even though it should be paid off.

If, you pay out right for your phone,then over two years you save money because your actual monthly carrier payment is lower.

If you do Apple's new upgrade plan, it's important to remember it's interest free. It also comes with Apple Care Plus. All Apple did was take the full un-subsidized price, add it to the cost of Apple Care Plus and divide by 24. Big difference, you keep the bulk of the money upfront. The only possible catch is if you are the type to not get insurance. If that's you, then don't do it.

If you are like me and upgrade every year, most likely you sell your current iPhone back to Amazon, Gazelle or something similar. If you do that you're subject to their offers and would be lucky to get half the value. You can get more going through Craigslist but that has its own issues and hassles.

With Apple's, if you upgrade after the first 12 payments, you're effectively guaranteed half value. If you keep it for two years it's no different. Yes, you start the two years over, but that's only an issue if you don't want to upgrade yearly. If that's not you, then don't upgrade yearly. If you do upgrade yearly it's irrelevant.

So no, you're no more trapped than on any other contract.

As for being stuck with a two year old phone at the end of your contract? How is that any different? You still have a two year old phone under any scenario.

For me, I'll be getting an iPhone next week on the upgrade plan. And since I've gotten every iPhone since the 4s, you can probably mark me down for a 7 as well.