The end of smartphone subsidies may be upon us, given T-Mobile’s uncarrier moves and AT&T’s new Mobile Share Value plan:
With the ‘No Annual Service Contract’ options, smartphone customers can save $15 a month on Mobile Share Value plans. Customers can receive these monthly savings when they: Get a new smartphone for no down payment with AT&T Next; bring their own smartphone; purchase a smartphone at full retail price; or when their smartphone is no longer under contract and they switch to the new plans.
Indeed, my mom received a letter from AT&T illustrating some of their new offerings. And, as CTO of the Zatz family, I reviewed her service and usage… then flipped the account to a new Mobile Share Value plan, cutting her bill nearly in half from $85 a month down to $45. The savings come via two mechanisms. First, given her limited data usage due to iPhone 4 screen size, I was able to put her on a tier that replaces 900 minutes with unlimited talk (and adds unlimited texts) but restricts data access to a mere 300mb. (I imagine many of her generation remain more interested in using phones for voice.) Oddly, the additional savings is not reflected as you’re evaluating plans, but only after you enroll – and an out-of-contract phone reduces the advertised monthly fee by $15.
The ultimate plan is to move Mom onto my T-Mobile account (unlimited voice and text, with 500MB of data for a mere $10/mo). But given some planned drives thru/to more rural areas this winter (where TMo probably won’t offer the best coverage), the AT&T maneuver buys some time while saving a few bucks.
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I'd consider it -- if they let me keep my grandfathered unlimited data. I don't care about unlimited voice or unlimited text - I never use close to my monthly minutes (let alone roll-over) and don't text (as iMessage gives me free data texts to most and Xfinity app gives me unlimited texting to anyone else). I don't even normally use all that much data, but want it for odd cases (such as when my Xfinity cable went down last Sunday a few hours after power went out and I ended up using Slingbox to stream football games). I'd even consider a limited data plan (2GB) if they let data roll-over like voice minutes...
Somehow I don't see that happening :(.
So... if you agree to avoid getting a new iPhone at the end of your 2-year contract, you save $15/month in direct savings. Over the following two years that would net you $360, which together with $199 out of pocket would get you to $559, about $90 shy of the retail price of the entry-level iPhone you'd get for that $199.
Of course keeping an iPhone for 4 years would mean that just before the iPhone 5S was introduced, in August of 2013, you'd still be on an iPhone 3GS. Still on iOS 5 presumably since I have a feeling (haven't researched it) that you wouldn't want to update it to iOS 6. Probably some apps that wouldn't run on it, but not awful. Suspect the battery wouldn't be holding much of a charge after 4 years. I think they estimate you lose about 20% of the battery life after 400 cycles, so after four years you'd be well under 50% of the original battery life. And of course there's a chance it wouldn't work at all.
Replacing the battery isn't that expensive, but will make this comparison look worse.
If you bought an iPhone 4 when it came out in June of 2010, you'd be looking to this September presumably to upgrade, perhaps to the new bigger screen model we all assume is coming. That one feels a little better actually. Not undoable. Well except for that whole battery thing.
I'm not convinced this really works out for iPhone users. For Android phones of course, something like the new Motorola or Nexus 4 that are available for full retail prices that are a lot lower, it makes more sense. And of course that might be where we're headed...
Right, I agree with Glenn here. Until they do away with subsidies, this doesn't seem like a great deal for iPhone users since the subsidy AT&T gives you to buy the iPhone is $450. That's $18.75. To switch over to the value plan would actually cost me $3.75 a month, plus I'd be on the hook for paying the upfront cost of the iPhone that instead AT&T is allowing me to pay in installations at what amounts to a negative interest rate (in comparison to the $15 proposed savings per month.). Therefore, until that $15 discount goes up to $20 or $25 a month, I'm not switching plans.