AT&T Drops Early Smartphone Upgrade Policy

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AT&T iPhone and other smartphone owners who like to upgrade before their two-year contract expires won't be getting the discounts they've come to expect now that the carrier has decided to fall in line with other cell service providers and drop early upgrade options. Until now, AT&T would typically give smartphone owners full subsidized pricing at 20 months when signing a new two-year contract instead of making them wait a full 24 months.

AT&T: No early upgrade prices for you!AT&T: No early upgrade prices for you!

 
The new policy went into effect on Sunday, June 9, and applies to all AT&T subscribers with contracts that expire on or after March 1, 2014, and upgrades are restricted to the same product category, meaning if you buy a smartphone your next upgrade has to be a smartphone as well.
 
Verizon also requires customers to complete their two-year contract before qualifying for full subsidized pricing, and T-Mobile has done away with subsidy pricing in favor of financing device costs as a line item on subscriber's monthly bills.
 
AT&T isn't offering any details as to why the policy change was made, but it's a pretty safe bet to assume the company wants to maximize its profits on contracts. Carriers recoup the cost of subsidized cell phone contracts over their two-year contracts, and giving customers an early upgrade option cuts into that cash return.
 
With less incentive for users to upgrade early, it'll be interesting to see if Verizon and AT&T increase profits or see a long-term hit from customers that choose to skip new phone models while waiting to be eligible for subsidy pricing.
 
[Thanks to Engadget for the heads up]

Comments

akcarver

Good thing I upgraded on Saturday. I went up from an iPhone 3GS to an iPhone 5 in one swell foop, thanks to the $100 discount for trading in the 3GS.

Tiger

Pretty much assures that I will be leaving AT&T on my next go around.

I almost did last time, but with two different data plans, it was easier to stay. They’ll both be out of contract then and it’s bye bye to the blackened Blue Eye.

webjprgm

It’s not just about updating every year, it’s also about the plus or minus a month or two flexibility to upgrade every other year without being stuck for a bit. 

Especially if Apple scoots around the release date, since it was Fall 2012 but it’s usually been mid-to-late summer.  Or if I decide to wait a month on one release to let the excitement die down to get one with less fuss (I did that with the iPhone 3G) then I’d be permanently behind by that month.

As it is, I updated right when the iPhone 5 came out. So if Apple keeps the same release date then I shouldn’t be affected. But I doubt that will stay consistent very long.

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