The Smart Way to Buy the new iPhone

As all the hype for today’s iPhone event ramps up, I wanted to write an article about something I’ve mentioned on some videos previously. As millions of people wait in anticipation of whatever the 10th anniversary iPhone is revealed to be, I can’t tell you what the new iPhone will bring, but I can tell you the smartest way to buy it when it is released.

It seems most people believe they must buy their iPhones from their wireless carriers. In the past this was the best way to do it, as the carriers would subsidize the cost of various phones. However, the carriers would then lock subscribers into a two-year contract in order to recoup the cost of the subsidized phone. In the last two or three years, carriers have started to move away from the subsidized model and instead offer payment plans on pricey smartphones, iPhones included. AT&T calls it their “Next” program, Verizon used to call it “Edge,” but now simply calls it “device payment program,” Sprint calls it a “lease” plan, and T-Mobile “Jump”. These payment plans are generally fair in my opinion, as the carriers do not technically lock subscribers into a contract, but instead simply require the payment of the balance of the phone in the case where subscriber leaves the carrier before 24 payments are completed. There is no interest charged on the payment plan and so at the end of 24 monthly payments, the phone is paid for in full for the same cost as if it had been paid all upfront. Also subscribers have the option of trading out their phone after one year for a new phone and starting over on a payment plan.

Now while the carriers aren’t technically locking subscribers into a two-year contract, the fact that the balance of a phone on a payment plan is required if a subscriber wants to leave a carrier certainly feels like a lock-in. Wouldn’t it be great if there was a payment plan that would allow someone a way to change carriers but keep paying the installments? Actually there is! The ironic thing is that this payment plan has been around a couple of years as well, it’s just that not a lot of people seem to know about it. Apple themselves basically have the exact same payment plan as the wireless carriers offer, bundled with AppleCare+. Apple calls it their “iPhone Upgrade Program.” The key is that the iPhone you get from Apple is SIM unlocked, which in technical terms means it will work with a SIM from any carrier, but in layman’s terms simply allows for the iPhone to be used with any wireless company. So someone that buys an iPhone using Apple’s payment plan can, in fact, change carriers as they wish without losing the installment payment plan. This, of course, assumes that the subscriber isn’t on a contract with their carrier. It appears to me, however, that most people are now not on a contract since the carriers began with their payment plans a few years go.

So to sum up, by purchasing your iPhone directly from Apple using their iPhone Upgrade Plan, you get all the advantages of the carrier’s payment plans without the lock-in. Smart, no? Especially with the expected cost of the new iPhone to be higher than normal, a payment plan from Apple is probably the way to go. Let me know what you think in the comments below!

  • Collin Fischer

    under the payment plans with the carriers (AT&T in my case), I also have an insurance plan.. it’s a reasonable monthly premium that covers up to 3 of all the devices on the plan and you can rotate devices in and out of the plan as needed. Under the AppleCare program, insurance is a part of the deal, correct? …screen breaking, drowning your phone in the toilet, etc?

  • Good information, Marcel! Thanks!

  • According to Apple’s web site for AppleCare Plus (https://www.apple.com/support/products/iphone.html) “Coverage for up to two incidents of accidental damage, each subject to a service fee of $29 for screen damage, or $99 for any other damage, plus applicable tax.”

    So I think this is probably similar to what you have through AT&T. One advantage of it from Apple is that you’ll receive service directly from Apple, as compared to some of the third-party companies that the wireless carriers contract with. Those third party companies may charge a fee for the repair/replacement that may be closer to $150 last time I checked.

  • You’re welcome!

  • Brian Douglas

    One concern that I have with AppleCare is that it does not cover theft or loss. I personally am confident with AppleCare but my kids are a different situation

  • It’s a valid concern, but I think these things are mitigated by the use of iCloud/Find My iPhone. First, iPhone thefts are way down because when logged into iCloud and Find My iPhone is activated, a thief can’t unlock or wipe a stolen iPhone. As well, this same feature allows you to locate its position so if it is stolen it becomes a hot potato. These two factors make an iPhone much less likely to be stolen anymore. And if lost it should be able to be found using Find My iPhone. So the need for loss coverage is not so necessary with an iPhone and therefore AppleCare.

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