Verizon gets into the early upgrade game with Edge

Verizon gets into the early upgrade game with Edge

Verizon doesn't want competitors T-Mobile and AT&T to get all the attention for their recently unveiled JUMP and Next upgrade programs, respectively. Today the company Verizon introduced its own plan, called Edge. The program gets started on August 25, 2013, and is available for Verizon customers who are already on the company's "Share Everything" plans.

Here's how Verizon PR manager David Samberg describes the plan in a blog post on Verizon's web site:

Choose the phone you want and sign up for a month-to-month service plan, it’s as easy as that. The full retail price of the phone will be divided over 24 months and you’ll pay the first month at the time of purchase. If you want to upgrade after 6 months, just pay off 50% of the full retail price of the phone and you can choose a new phone and start all over again.

T-Mobile's JUMP program demands a hefty down payment up front and incurs a $10 per month fee to stay enrolled. AT&T's plan is an annual upgrade program, and so far they haven't said what the actual cost is (the plan goes online later this month, we should have details then). Verizon doesn't charge anything extra, but you do have to pay off half the full retail price of your phone to get a new one.

Some quick back-of-the-envelope math for you: A 16GB iPhone costs $650. Broken into 24 monthly installments that's about $27 per month. Over six months, you've spent $162. Half the full retail value of a 16 GB iPhone 5 is $325, so you'd have to pay another $163 to be able to get another phone.

Is that worth it? If you were catching things in the middle of Apple's upgrade cycle, maybe. But Apple typically upgrades iPhones annually, which means you might have to wait as long as a year (perhaps once you've done the first upgrade) before it makes sense to switch again. In which case, you've doubled that installment payment amount, and Verizon ends up with the same amount in its pocket again.

Bear in mind that like with their competitor's plans, if you act as soon as you're eligible to get another phone, you're turning in your old one - so this works out more effectively like a leasing program than a financing deal.

Any way you slice it, folks, the deck is stacked in the house's favor. I'll go back to what I've said before - these plans are good if you're strapped for cash, but the best value you'll get long-term is paying up front for an unlocked phone that doesn't make you have to deal with any of this cell service provider mishigas at all.

We'll be doing a more in-depth comparison of these plans soon. In the interim, tell me what you think: Do these plans interest you? Are they going to help you save money? Or is this just another way for cell phone companies to rip off their customers?

Peter Cohen

Managing Editor of iMore, Mac and gaming specialist and all-around technologist. Follow him on Twitter @flargh

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Reader comments

Verizon gets into the early upgrade game with Edge

10 Comments

T-Mobile hefty downpayment up front? Eh?

Peter, the down payment is the same as you would pay for a subsided phone on Verizon and ATT, which you pay when you upgrade on their upgrade programs as well.. Sometimes the downpayment is cheeper than the subsidized price.

Not sure why you're calling it hefty????? Please explain....

I think you've read the PR release differently than I. I took AT&T and Verizon's explanation as NO down payment (other than first month, which will be about $30). So you're not paying $200 for the iPhone, upfront, each year. You're paying, what would SEEM to be $30, up front, each year, but you're paying $30 every month on top of your monthly bill.

This actually doesn't seem to be a terrible deal even if you upgrade every year. $849 64GB iPhone only costs $425 per year (x2 = $850) (as opposed to $399 subsidized cost on your eligible year $849 non-eligible year = $1250). Even if you sell your phone on eBay or trade it in for $400 you're still breaking even (unless I'm missing something). Might as well just do Edge and not have to worry about the hassle of selling, etc.

Sent from the iMore App

This is all good for those people who like to switch phones but they are leaving out a very important part that T-Mobile did....lower phone plan costs.

They were saying that you will need to sign up for a month-to-month service, which makes me think monthly service fees will change. My question is this: will the cost of monthly service fees drop to compensate(ish) the lack of a need for subsidy? I guess we'll find out soon enough, but my thought is, no. All of these companies are greedy as all get out (regardless of how much "power" they say they are putting back in the consumers' hands), and that's the bummer of it all.

t-mobile really screwed us opening this door.
But Verizon and AT&T need to adjust their plans now or there's no reason to stay with this company (service in NYC all equal).
And of course Verizon has the most expensive upgrade plan, of course. "Half the retail"

So when a person pays half the retail to get rid of their phone, do they have to pay another "1st month" to get the newer device they wanted. If so that 163 is with plus 31 (estimate).

I'm switching to t-mobile buying my phones full price and leaving it at that. If you can get an apple gift card from somewhere your good to go regardless.

T-Mobile is still unlimited data too. Thats the one thing that would get me to jump if they had decent coverage here. Unfortunately no one but Verizon does.

The more I hear and listen to the T-Mobile JUMP, AT&T Next, and Verizon Edge programs, I can't help but think of a car lease. In essence they help get you into the phone(vehicle) for little to no money down; charge you over-priced payments to cover the cost of the depreciating item, and then you return it to them when you want a new one which allows them to resell and redistribute it for a cost. Which allows them to make money hand over fist all the while playing and feeding off the pride of the masses playing to their desire to always have the latest and greatest devices.

The math may look like this:
Value of device - amount of depreciation - the value of the device at trade in = You pay more to the carriers than just going the traditional route.

But hey, you can get a new device every 6 months to a year...that's worth lining the pockets of the carriers, right?

Haha!! Currently listening to the iMore show episode 355 and Rene comments on these plans in somewhat the same regard. I guess great minds think alike. :)

The house always wins!

Seriously, I know there are a lot of factors to consider in this. All the cell companies have been getting out of most folks is roughly 1/3 of what they actually paid for the device but make it up in the long term of the contract. By stating that I sure as hell am not saying "Poor Verizon, At&T, etc." I know they are a business and operated to make money, I just think this is a new way of tapping it. We the consumer are gonna pay no matter what, but like my father in law loves to say, "You pay me now, or you pay me later." I used to work in rent-to-own, not because I wanted to, but because I had to in order to feed my family. I could never understand why someone would go down that road of paying double the retail price just to have nice stuff but now it is the nature of the business beast. I think Peter has it right, if it is worth it to you to go down this road and you are willing to pay it then go for it. I personally paid full retail for my iPhone 5 after having my 4S for a year to get the "latest and greatest" and to keep my unlimited data. I did all this math at the time to justify to myself why I needed to do it. My conclusion was: I paid $800, I'm still paying the same monthly fee as anyone else on contract, and my perk is that I keep my unlimited data. By that math I am still paying for the subsidized iPhone 4S, but only until October. After that, If I choose to keep my 5 (assuming we get the new iPhone this fall) I still have to pay that same monthly contract price although my subsidized 4S is paid for; I can pay promotional pricing for the newest iPhone subsidized over the next two years and loose unlimited data; or I pony up $600-$900 for the newest iPhone off contract and continue to pay that same contract monthly rate with nothing subsidized to show for it. No matter what, the house wins.