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?