Why you shouldn't expect early upgrade eligibility for the iPhone 5

If you're itching to grab the the iPhone 5 on release day, probably the first thing you checked was your upgrade eligibility. Odds are, if you purchased the iPhone 4S last year, you aren't eligible this to upgrade yet this year, and so you'll have to pay a higher price to snag the latest and greatest from Apple.

In the past, AT&T and many other U.S. carriers have made exceptions when it came to upgrades for iPhone, but they're not anymore. And despite our expectations, they're not obligated to.

Last week one of our editors, Leanna, wrote about her current situation and why she'd be switching to Verizon from AT&T. While her specific situation was different than many, she probably isn't the only one that hasn't had any luck getting their carrier to change upgrade eligibility.

Here's the reason -- they basically lent you money in the form of a subsidy so that you could pay less for your iPhone when you bought it, with the understanding you'd pay that money back over the course of your 2 year contract. Since your 2 year contract isn't up yet, you haven't finished paying that loan back yet. So your carrier would lose that money by letting you upgrade early while also fronting you more money to subsidize your next phone.

Now carriers make so much money that no one's shedding any tears over the difference, but they're for-profit companies with shareholders, and they pay a pretty penny to Apple for the iPhone -- over $400, which is higher than other phones -- and they want to make as much money as they can out of it.

It wasn't always that way, of course. When the first generation iPhone came out, there was no contract pricing available. The phone was fully unsubsidized and if you wanted it, you paid full retail for it. That meant that when the iPhone 3G came out the following year, many people still had an upgrade available (as long as they didn't use it on any other phone after purchasing the original iPhone). This led a lot of people to believe that AT&T was doing them a favor when in all actuality, they weren't.

For years after, people caused a scene over not being able to upgrade every single year when a new iPhone came out. AT&T even made exceptions and moved upgrade eligibility windows, sometimes by months, to accomodate customers that weren't yet eligible. In hindsight, that probably wasn't a smart move on their part and led many customers to feel entitled to an iPhone upgrade every single year.

Within the last year, many U.S. carriers have changed their upgrade policies and their ETF structure to better handle the amount of customers using smartphones in general and the iPhone in particular. The iPhone is also now available on every major U.S. carrier except for T-Mobile and the options customers have to choose from are better than ever.

AT&T also changed the way their upgrades are calculated. Until this year, if you had around $80 in charges on your primary line and paid your bill on time every month, your primary line was probably upgrade eligible every 12 months or so. Now with the iPhone 5, many customers are seeing their upgrade window is 18-24 months instead. This isn't a brand new policy. After purchasing my iPhone 4 back in 2010, my upgrade eligibility immediately showed one calendar year later. After purchasing my iPhone 4S, my eligibility showed May of 2013.

In Leanna's case, her ETF was actually less than it would be to purchase the new iPhone and stay with AT&T. Since AT&T doesn't seem keen on moving eligibility for anyone, it's cheaper for her to make the jump to Verizon. Leanna's situation made it around $45 cheaper to switch to Verizon. This wouldn't be the same for everyone, however, since ETF is calculated as a fee that is decreased every month based on the kind of device you use. While users that purchased an iPhone on launch day or close to it may be in the same boat, users that didn't probably have far more left to pay. Also don't forget any additional lines you have that you'd have to pay an ETF for unless you're willing to pay two carrier bills. My guess is most customers want their wireless lines on the same carrier. Sometimes the system works to your advantage but in most cases, most users won't find it beneficial to cancel a contract not even half way through it. The house, as they say, always wins.

Keep in mind this isn't unique to the iPhone. If you wanted to purchase any other phone, and you weren't eligible for upgrade pricing, you would have to pay full retail price for it. And you'll most likely see the same practice across all carriers, at least in the U.S. It also isn't unusual for carriers to lock down customer service's abilities to change upgrade dates and offer bill credits without approval when iPhones are announced and released. Even if they want to help you, they may very well not be able to.

For the general public, who don't care about upgrading every year, this isn't even an issue. It's something that mostly affects gadget geeks like us.

What it comes down to is the carrier's bottom line. Smartphones are eating more data than ever, especially the iPhone. Apple demands a high price from carriers in order to carry the iPhone as well. The hike in ETF's and the change in eligibility helps carriers support the bandwidth and pay the premiums. Long gone are the days of carriers bending the rules and treating iPhone users differently than everyone else. If anything, they'd probably rather we all bought Android phones that cost them less to buy and let them monetize with pre-loaded apps and services.

So, if you intend to upgrade every year, plan on paying a premium for doing so. Previous years were exceptions, this is normal.

iMore senior editor from 2011 to 2015.

  • I ordered the iPhone 5 on Verizon for $200. I am going to pay the $270 ETF on my current Verizon line once i get the phone. I sold my 4s last night on ebay for $370. When all is said and done i'll have put out around $100 to get iPhone 5 and a new number. (I sold my paintball gun for $75 last Friday so it's actually costing me under $30)
  • Sounds like a good deal for you. Unfortunately some of us can't/won't give up our phone numbers. My solution is to steal my wife's upgrade and hand down my 4S to her. Then take my/her old iPhone 4 which will be unlocked by AT&T and sell that. It all works in the end. I'll be standing in line come this Friday, can't wait.
  • There is such a thing as porting over your existing number from one carrier to another.
  • I do much the same. I pay the bill for 3 family members on my AT&T account so I get 3 upgrades every two years and they get my handmedowns :)
  • How much did ATT pay you to write and post this article? AT&T does not lose money subsidizing an iPhone every year. They actually rope you into a contract and charge you more for services than any other carrier. While it may be true AT&T may not lower your upgrade fee or eligibility date because of policy, they can, and I my case did, credit me the difference on my bill if I would preorder over the phone that instant when I called asking what my etf fee was. I explained that it was cheaper to switch to verizon, that Verizon had better lte coverage and that I prefer AT&T but was willing to pay my etf and switch had they not credited me the difference. First off, I did not ask for this nor did I demand that they change my upgrade status. I simply explained that it made sense to switch and that I would hope that AT&T would value me as a customer as much as I value there service over the competition. They could get 24 more months of me paying a $120/mo or they could have my $225 etf. They chose to keep me as a customer and credit me the $250 as long as I preordered the iPhone 5 that instance over the phone. We both are happy, they get there contract extended and I get a new iPhone after owning the 4s for a year.
  • they are probobly only getting 12 months of you paying that because next year will be the same thing
  • Which means next year they get another 24 months....and the year after that...ect.. Like I said you don't have to be a CEO to have basic math skills or common sense. If you look at it that way they don't have anyone under contract because anyone always has the option to pay their way out. So in that case AT&T only has me for this month and because there is an eft clause in the contract they only extended me for this month because that's all I paid for. I guess common sense is always common.
  • They typical subsidy on a smart phone is "worked off' 20 - 22 months in on a 24 month contract... I don't blame carriers for at least being hard-arsed about it to "break even" - holing out until the passing of the last day on month 24 before allowing an upgrade is a bit ridiculous... but it is what it is.
  • And where do you get these figures from?
  • Great article Allyson! Bout time someone gets it right and actually goes into detail without a BIASED opinion
  • That's a totally biased article and it makes no sense for atts bottom dollar or for shareholders to allow customers to switch carriers because of a couple of hundred dollars out of a $2k-$3k contract. Make less profit or no profit....hmmm what shall I choose? Keep customers for 24 more months or lose them to the competition? You don't have to be a CEO to have common sense or basic math skills.
  • its not worth that much if the same person does the same thing every time a new iphone comes out. What if they switch to 9 month cycles? or 6 month? then the carrier is in trouble if they keep the policy.
  • Not really. All it will happen is you will get less for your services and/or the carrier will charge you more for extras and/or you will have a much higher ETF. Ultimately, they will make money and you will pay for it.
  • What trouble?
  • dupe in error.
  • And I can bet Sprint will be the MOST hard-@$$ed about this. They guaranteed Apple a lot of money to sell iPhones, so you know this is one phone they will not be allowing people to upgrade early for, regardless of circumstances. If anyone manages to move up their upgrade for the 5 (from the 4S) I'd be utterly shocked.
  • I'd with a great customer service rep and a credit on my bill.
  • As you point out, it's the inconsistencies which lead to all the anger. With Rogers here in Canada, my frustration is that at the time of purchase of my iPhone4, the window for full subsidy was 24 months. No problem, I planned to skip the 4S anyway. Problem is, over the next two years, Rogers changed the rules twice. Under the original rules, my subsidy was paid off at 24 months, but now, 26 months later I am under the latest policy and still have 10 months remaining? This type of policy change should not be retroactively applied to in-flight contracts. It is purely a cash grab. "Oh, you didn't upgrade yet? Well we decided that the loan that yesterday was paid off, today is no longer paid off and you still owe us more money!"
  • I wouldn't think that they can legally change the policy on you without your authorization. In effect they have given you a new contract without your consent/signature.
  • This.... They will not make changes to your contract during your contract, otherwise they're in violation and you can walk away without charge.
    That won't happen. They find clever ways of sliding this in.
  • That is such BS!!! I can't believe they seriously are trying to do that to you I would be absolutely furious and I would cancel my contract. How can you have 10 months left after being with them for 2 yrs???
  • In Canada, the 3 year term is needed to get the best subsidy. 2 year terms here cost us $100 more than US users. They weasel out of the pricing game by never putting the terms into the contract - it's simply a "policy that is subject to change...". As of January they became much clearer about it and I think it may be in new contract terms - but the policy has been retroactively applied as if it was part of the contract to everyone still on contract.
  • yes the subsidy in Canada is 36 months this person didn't understand probobly had a bad salesperson at futureshop sign him up
  • I'm available for a upgrade Oct 7 and I can't even get Verizon to waive a week so I can buy the iPhone 5. I bought the iPhone 4 and skipped the 4s so I would have the upgrade available, that didn't work out to well!!!!!!!
  • My girlfriend is in the same situation. She's eligible on October 1st on one of her lines. No go. I told her to call and try but don't expect anything. Sure enough, they couldn't do anything. She's just going to wait a week.
  • Exactly same situation as me. One of my lines is eligible on 10/07. And I was gonna use it to upgrade my line. I called CS 4 times. Even talked to their supervisor each time. I emailed them. I emailed ther regional manager. I emailed the manager responsible for my corporate account. No luck whatsoever. All I wanted was to get 2 weeks!! TWO WEEKS??!! Really Verizon? Oh well. I guess I'll have to wait.
  • My Grandaughter had a BlackBerry due for upgrade last year around August 15th. I called Verizon and told them she wanted the iPhone 4 but had to be at the college by August 6. They gave me a confirmation no. and told me to head on down to the local VZ store (official company store not the franchise) and they hooked her up about 2 weeks early. I thought this was very accommodating of them. I used a flip phone upgrade on another line last year to go from the 4 to 4S so I got another year or so before I can go for the 5. Not sure if I would go from 4S to 5 anyway but the proof will be in the pudding Wednesday when we see what iOS 6 does for the 4S
  • Verizon always been good to me by letting me upgrade early. Even months early in some cases. But I guess they changed their policy. This year they are really not budging. I'll try again on release day. Maybe I'll get lucky again.
  • Yes, 10/7 is your upgrade date if you bought the 4 on verizon's release day or by preorder. And its ridiculous that we aren't allowed to get the 5 on release day. Bad will is all this causes.
  • Exactly! Is not my fault apple doesn't release the iPhone on the same day every year.
  • bailey0907, i know this isn't a great solution being that i see your point of upgrading 2 weeks earlier to get the iphone 5 on launch date. if your upgrade date is on or after the shipping date of a phone, they will let you put in the order now so that you can receive on that planned shipping date. the pre-order date for the 5 is now up to October 5th. I'm sure by later this week it will go our more. Once that happens, you should be able to at least place your order. I had a friend on Verizon and his upgrade date was in between the initial pre-order date and the actual launch of the phone, I think like Sep 18th. So he was able to place his pre-order. Like I said, still a bummer you can't order early. But at least this way you don't have to wait till October 7th to place the order when the shipping date is like 1-2 weeks out still.
  • Great points Allyson. However, on the other side of the coin I don't think carriers discount your rate once the subsidy is paid off, correct? I'm not saying I believe we should get upgrade pricing every year, but once your two years is up, I think the price of service should drop, until you have another phone subsidized. That was honestly the only reason I purchased the iPhone 5. My 4 was working great...but I realized that I'd just be giving extra money to ATT for nothing.
  • Good point! I never thought about that. I've been eligible for an upgrade since Nov. 2011 since I skipped the 4S and kept my 4. I've been saving my upgrade specifically for iPhone 5. I guess I've been paying AT&T extra for almost a year now the way you put it. :(
  • Exactly! It was the pricing that came out from the Prepaid Straight Talk and Virgin Mobile plans, that made me realize how much extra I was paying ATT each month. I would definitely have moved to a prepaid system with my next phone, if I didn't have a 20% corporate discount attached to my ATT account.
  • I don't really think this is how it works. Rate plans are rate plans (I won't argue carriers are high, because they are). The 2 year contract is what you are tied to. If you went into AT&T or any other carrier with a device of your own, you'd pay the same rates you would getting a phone from them, the difference is you aren't obligated to sign a 2 year agreement and you can go month to month. You'll also have an upgrade at a discounted price available to you whenever you'd like as long as you sign an agreement for 2 years. You're bound for 2 years TO pay off that subsidy. If you don't, you pay a fee and no longer pay for the service any longer. Does that make sense?
  • I think jimmers and chris are correct. Their point has nothing to do with the 2 year contract and more to do with the fact that the "subsidy" payoff (over the two years) that's imbedded in ALL service plans. Your service plan DOESN'T CHANGE once the "subsidy" is supposedly paid off. I've always told people that think they're smart by being "off contract" that they're actually just giving the carrier free money in the form of the unknown subsidy that's built into every service plan. This hold true for folks who pay full fare for phones (any phone) and never want to be on a contract. You're basically losing money.
  • Nice article, although I think that the comments about the ETF being based on how much you pay monthly is incorrect. At least with AT&T and Verizon, there is a formula to calculate the fee and the amount only varies if you have a smartphone or a feature phone. For AT&T, the ETF for a smartphone is $325 minus $10 per month, going to zero after 24 months. For Verizon it is slightly higher at $350 minus $10 per month. For most people buying an iPhone, if don't qualify for a fully subsidized upgrade, it is usually slightly cheaper to switch providers, although when you take into account the $36 new account fee, it is probably not that different (and it is a bit inconvenient to switch). I'm switching from AT&T to Verizon and saving a couple of dollars in the process, although I'm doing it because I want to be on Verizon and not to save any money.
  • Yeah, I may have a new $36 account fee; however, if I stayed with ATT, they'd charge me an upgrade fee. The new account fee is a mute point because I'm almost paying it by staying.
  • Folks are killing me acting as if they are owed a discount to upgrade to the iphone5. Phone companies are in it for the cheddar. If you switched to the 4s and is now sour about having to pay full price fo the 5 then i dont feel sorry for you. We all knew the 5 was coming sooner than later. I was able to upgrade from an iphone4 in march of this year but i purposely waited for the announcement of the 5. Now that its here i only have to pay 200 for it amd just sold my 4 for 200 on ebay( mint condition) so basically im trading in my 4 for the 5. :)
  • +1
  • This. A certain level of blame should go to the providers that they have allowed early upgrades for prior models, but I think it's pretty ignorant to expect that you should be able to get a new iPhone for subsidized price every year. Two years for discounted upgrades has been standard ever since cell phones became mainstream, so you're being ignorant/arrogant if you think you deserve a new iPhone on subsidized price every year.
  • How about comparing the etf with early upgrade fee of 250?
  • At laaast! Someone make a great article so poeple that still dont understand and cry abour this can fully uderstand... If u want it so bad and u are not elegible Then pay what is supposed To be...
  • At least this article isn't a rant
  • i knew i wasn't getting and upgrade as soon as they announced the changes months ago. That's why the iphone 5 would have had to print money, clone Maxim models, and cure cancer for me to want to spend the ridiculous premium to get it at launch.
  • Hehehe ..... cool comment .... especially about the Maxim Models .... ; )
  • Great article Allyson. Here's the thing I don't get: I am in the same boat as most (not eligible until May 2013). If I want to upgrade, why not make the offer to lock me in for another 2 years from today. In essence, I still would have 3 years left to "pay the loan". If I wanted the upgrade that badly right now, I either pay the ETF (and take the 4 other accounts with me - not good for AT&T) or pay the full price (which, for the most part, all goes to Apple anyway) - which is still not that great for AT&T: I could leave early next year if I wanted to. Locking me into 3 years right now seems to have all upside for AT&T, yet they don't offer it.
  • I'd say they don't offer this because of a snowball effect. Then next year you'll want to extend your contract to 5 years, it just doesn't make sense in the long term. Eventually you'll not be able to upgrade due to the ridiculous length you've extended the contract to.
  • Also, look at the early upgrade fee as buying off the old contract and starting fresh with a new 2 year commitment. Same effect without the snowball.
  • Also, look at the early upgrade fee as buying off the old contract and starting fresh with a new 2 year commitment. Same effect without the snowball.
  • If you look at the article, it doesnt have all of the upside for AT&T. You would be getting 2 subsidized phones (4s and 5) on a 3 year contract. Don't you think if they could make more money that way, they would do it ?
  • A year has gone by, so it would be two subsidies on a four year contract, i.e. same ad normal.
  • from the carriers perspective they are in it for profits. It makes sense to subsidize one phone over 2 years. then in 2 years they turn some profit. It doesn't make sense to subsidize you for two phones over three years. And consider that the very next year you'd be asking for the same deal, and your back to subsidzing you one phone per year or by that time 3 phones over 4 years. Every year they take a profit margin hit. And i'm sure they'd argue at merely if it's one a year it's less worth it for the profit. Also the carriers are not the ones choosing to release a new model every year. I'd bet they honestly would be fine if everyone released only every two years. Theyd make the same money.
  • I have to agree with Allyson. Even thought I was lucky with AT&T allowing me to "early upgrade" from the 3GS to the iPhone 4, I had not an expectation I was entitled to be able to, rather I was hoping AT&T would "allow" me to. On the other hand: yes, a contract is a contract, but what exactly a contract of? I think it is a contract to use AT&T as my mobile carrier for 2 years, not to use a certain phone for two years. Nowhere in the contract does it say I must spend a certain amount of $ in that 2 years, yes? EX: if I decided I want to use my old feature phone again, instead of my iPhone 4, and thus not need to pay for a 'mandatory' data option for iphone, does this violate the "two year contract?" I'm still on AT&T and still using my same phone number, so I am pretty sure I'm not violating the contract. So, allowing me to change to a newer phone should be no more of an issue than using an older one, as I'm still "on contract" with the understanding that "2 years" will be counted from the day I get the newer phone. As for the subsidy, that's AT&T's decision and risk. If I went to that feature phone, and no longer paying the huge data costs, AT&T still would not get that $ back for the now unused iPhone.
  • I believe that you have to maintain a data plan for the term of the contract.
  • Ah! I didn't know that. Thx for the info!
  • I believe the data plan needs to be maintained for the first year of the contract at which time you can remove it.
  • My message that I got from AT&T says 11/28/2012 however I bought my iPhone 4 on May 2011 so I am getting the upgrade early without paying any additional fee...
  • AT&T allows for fully subsidized upgrade after 18 months.
  • This is a really good post. It makes a lot of sense when you think about it. But it still doesn't hide the fact that AT&T really were kind of screwing over their customers and giving them false hope. If they didn't plan on bumping up customers eligibility every year, then they either should have 1) never done it in the first place. Or 2) went as far as make a press release stating this wasn't going to be a yearly favor to its customers. It's not fair to string your customers along and give them a sense of hope when they knew it wasn't going to last. One quote really made me laugh though. "Keep in mind this isn't unique to the iPhone. If you wanted to purchase any other phone, and you weren't eligible for upgrade pricing, you would have to pay full retail price for it." I spoke with not 1, but 4 different AT&T reps and supervisors over the course of a 24 hour period, and they all said the same exact scripted line "Sir if it was any other phone we would be more than happy to bump up your eligibility so you can get the phone at a lower cost. Is there any other phone you'd like? Maybe (was offered Samsung Galaxy S III, HTC One X (twice) and Lumia) instead of waiting for the iPhone?" Then they went on for about 5 to 10 mins how this is Apple's fault. I don't know who's fault it is but if you wanted to retain customers on your network you'd think they'd make an exception or fight Apple to let them give the lower price considering they're competitors are offering better LTE network or truly unlimited data. This could be the fanboy in me talking but its all because this is the iPhone. Like I said 4 reps and 4 supervisors all told me I could have have ANY phone I wanted at a lower upgrade price BUT the iPhone. Whatever. Just shut up and take my money lol
  • It's probably Apple's fault, but only in the sense that they are charging the carriers much more to offer the product, and not because they specifically said "Don't let anyone upgrade early!"...but who knows? I'm not a iPhone user (sorry), but I do know that about a month ago I called up Verizon and managed to get them to move up upgrade up about 3 months to get the Galaxy S 3, and all I really had to do was convince them that I wasn't happy with my current phone. Bottom line, if the carriers stand to lose money by allowing people to upgrade early, they won't do it. I'm almost positive they look at it from every angle, and have even determined that the loss of revenue from customers that leave to go to another carrier wouldn't offset the costs of allowing everyone to upgrade early. Trust me, you can threaten to leave all you want, they're already prepared for that to happen. I'm not agreeing with these policies are even saying they are fair...but it is what it is.
  • You could also look at is as glass half full.
    Consider yourself lucky that you got the other bump up in eligibility .
  • I think some of the better comments are above already. 1) There are WAY too many inconsistencies in the policies and enforcement, which naturally makes people angry at the system. 2) The carriers sure don't discount your rate plan if you bring your old phone or once your 2 years is up (and you don't get a new device), so why should be we empathetic to the carriers? As to the above post, I am the same. My date said 12/12/12 and ATT customer service said nothing they can do, so I paid the extra $250. I didn't want to wait past the 14th and not get a phone for weeks. But this just proves point #1
  • It's all a lot simpler with AT&T than this article describes. Figure out your ETF, if you can't, just dial 611 and ask them what it is. As a 4S user (who got an early-upgrade for free) mine came to $270-ish. AT&T offers a $250 early upgrade option that no one at iMore seems to know about, even though they're giving considerable page-time to AT&T upgrades. As a grandfathered 'unlimited' data subscriber, I've no desire to switch carriers -- also, I often use data and voice simultaneously and would miss that. For most, it's actually slightly less to remain and pay the surcharge, which I've done. It's all clearly laid out for you when you complete the online upgrade, or, if you call in your order.
  • The $250 early upgrade option is in addition to the price of the phone. So a 16Gb phone would cost $450 plus a $36 upgrade fee. On top of that, this option starts a new two-year agreement, so you wouldn't be eligible for a full upgrade for another two years.
  • Duh, who would think otherwise... you do need to extend for another 2 years and pay $250 to then pay the upgrade pricing -- definitely something to consider as an option to ETF fees if you're happy with your carrier and the services you have. Most definitely something to write about in an article discussing whether or not to switch carriers and eat the ETF fee as a means to upgrade your iPhone ;-) Thanks though for stopping by...
  • The way you worded your original post: "AT&T offers a $250 early upgrade option that no one at iMore seems to know about, even though they're giving considerable page-time to AT&T upgrades." makes it sound as though you were referencing some magical $250 dollar purchase price that hadn't yet been discussed. However, Leanna went into detail about in her post (which sparked this current post by Allyson). So yes, iMore has brought up the additional $250 early-upgrade surcharge.
  • I don't think there's a danger of anyone thinking if you pay $250, it's somehow a 'magical $250' purchase, except apparently yourself. There is no mention of this $250 upgrade fee in either of the postings you mentioned. Thanks though for your input, even if incorrect...
  • Oh really, you illiterate, passive-agressive piece of internet garbage? From Leanna's article: "I learned today that my account is only eligible for "early upgrade" pricing, which is $250 more than "full upgrade" pricing. So a 16 GB iPhone 5 will cost me $450 instead of $200. Ouch."
  • Thank you. I was starting to feel like I'm imagining this 250 fee. It seems fair to me. If you wait two years, AT&T will eat 450 off the full price when you upgrade so you have to pay 200 for the phone. If you only wait one year, they'll eat 200 off the full price so you'll pay a 250 early upgrade fee along with the 200 for the phone, so you'll pay 450 for it. I don't know why people expect the FULL discount before it's due.
  • People expect it because carriers used to do it. Used to be 1-year contracts were the norm, and, in a sea of flip-phones, you could get a new one every year. Then, they switched to 2 year contracts but let you get full upgrade pricing on new devices after 1 year with a 2 year extension. That's been phased out now and you can extend and pay a surcharge, or wait. One of the things that happens when so many mergers between carriers have happened that our choices have dwindled...
  • The answer to this problem is simple. Bring back these one year contracts. If there is a $450 discount on a 2 year contact ($400 on all iPhone before the 4s) then logically it should be $225 on a 1 year and I would not have an issue with that. Even if there was a slight premium say only a $200 discount I'd still be okay with it. When Verizon got the iPhone they still offered 1 year contact on all phone but the iPhone. AT&T offers 1 year contacts online except on the iPhone. When people's only option is 2years or full price no wonder they go subsidized & with a new iPhone every year until there is a 1 year option, people will be upset.
  • Actually, the real 'answer' is that if you have a problem with the upgrade policies of one carrier or device, switch to another -- simple really... ;-)
  • Actually that is the only answer right now. As Leanne posted earlier (and Ally referenced in this post) it is cheaper to switch carriers than to pay full retail. If both AT&T $ Verizon work or you that is the cheapest option ;)
  • It's not technically a one year contract but AT&T offers exactly what you want. You may have to sign for a two year contract to get the 450 subsidy the first time, but in one year you can do an "early upgrade" with a fee of 250, so AT&T is giving you a 200 dollar subsidy just as you deem fair. So we'd be paying 450 for the iPhone instead of 200 because we didn't wait the full 18 months. Sounds fair to me...
  • It does sound fair and is exactly why I'm seriously considering switching to AT&T from Verizon after 10 years. Well that & simultaneous voice and data plus a higher employee discount. My plan is to get one and try it for the 30 days and see it if works for me.
  • The difference is that 1 year contracts made sense when phones used to cost $300 bucks. Nowadays phones cost at least double that, therefore a 2 year contract. If in the future, we end up with holographic displays, glass HUD and a coffee maker and it costs triple that amount, you'll see 3 year contracts. (Canada excluded of course, since we already have these contracts)
  • I forgot this was the case nowadays. They changed that formula a while back. Sorry about that. before it used to be based off of several factors.
  • Nice article, yeah its expected for carriers to start shutting that down. Since the phone its more towards the main population and not the geeks, I would say that most people will just keep the phone for 2 years. Its already a given that the next iPhone (5S) Will be an upgrade of features and not of designed. I made the choice to move from Evo 4G to the iPhone 5 just because of the redesigned and because I don't tend to change phones every year, by the time I get a new upgrade a new iPhone redesign will be in the market and I'll get that. I passed on the iPhone 4/S because I didn't like the designed, but I don't like the 5 :-)
  • Any business who thinks a contract isn't negotiable or able to be changed is in the wrong. ATT set themselves up for this when THEY changed the upgrade policies in the past (contract change), and didn't now. Someone with $$ should make this into a class action lawsuit. Yes, I am caught in the midst of this trickery, and feel ripped-off. On the other hand, being a loyal customer for over a decade they make me feel my iPhone 4 purchase was the wrong thing to do, and I should have kept my 3GS until the 5 came out. Somewhere, sometime the major carriers will get back what they have done to their loyal customers. hopefully sooner rather than later.
  • Phone companies are still making exceptions. I was angry when AT&T wouldn't let me qualify for the subsidized price of the iPhone 5 like everyone else. In fact, I made several posts about "entitlement vs. expectation" on Leanna's post. Because of that, I wasn't able to order on launch day last Friday morning. I called AT&T and threatened to quit, pleaded, bribed, cajoled... but nothing worked. However, overnight, something changed. Later on Friday I decided to call back to accept some of the other retention concessions they offered me. Lo and behold, to my surprise, the retention department said that now I magically qualified for the fully subsidized price on my phone. Needless to say, I quickly ponied up the $399 for a 64gb iPhone 5 and threw my 4S on eBay. So, the carriers are making exceptions, still, thus continuing the expectation game. For me, I can't say if it was my 15 year loyalty to Blue, or my ability to haggle the retention folks. All I know is that, because I asked, nicely, they eventually came around - the same as they have done each year previously. Go Blue! :)
  • I'm an AT&T customer, I bought a 4S last year with two year contract. Out of curiosity I checked my eligibility to upgrade to the iPhone5 via the AT&T app on my iPhone. It said I was able to upgrade because I'm a "Valued Customer". I think I may just sell my 4S and upgrade. :-)
  • Be careful. Your early upgrade fee may be in the area of $250.00
  • I just checked via Apples site and it's 449.00 before May 15th 2013 and 199.00 after. No Bueno!!
  • And what is someone who switches carrier because of this (like Leanna) going to do next year when the iPhone 5S/6 comes out and their new carrier also does not want to offer a 1 year upgrade? It's kinda silly expecting your current carrier to offer you a heavily discounted smartphone every 12 months unless you pay way more than an average customer. The only thing I would like to see are cheaper contract plans or pre-pay plans from the national carriers for people who bring their own phone paid for at full retail. Yes they're for-profit companies, but someone who doesn't take a subsidized phone shouldn't be paying the same monthly fee as someone who does.
  • This points to my earlier reply. Service Plans for folks who "bring their own phone" do not exist, or are a well kept secret. Take an unlocked phone to either ATT or Verizon and I believe you will end up requiring to select from one of the same plans that you would have if you bought a subsidized phone from them. If there are non-subsidized plans out there (on a major carrier) I'd like to hear of them......silence is deafening.......
  • She already explained she'll be swapping with her husband every year to stay on the upgrade train.
  • Fantastic article. Really helped to clear things up! Thanks very much
  • Great article. I never had an iPhone until the 4S. I signed a two year contract. I am not eligible until May 2013. With only four monts until iphone 6, I will wait. I would like the iPhone 5 for the features, but the 4S will run iOS 6 very well. I can wait. All the carriers were aware of what they were getting into with Apple. They pay top dollar for the phone. They have to make a profit, but it needs to be a fair one. I am just curious about how the carrier policies will affect the over all sales of the iPhone 5?
  • I was happy with the early upgrade from AT&T before though I did not intend to upgrade every year (I did iPhone, 3G, 4). Like you, I was eligible for a 4S when I knew the 5 was 6 months away so I just waited.
  • Glenn, I agree 100%. My first iPhone is the 4s. I'm excited for the iPhone 5 folks, and I'm personally thrilled to be able to download iOS 6 this week,....I guess, it does come out Friday, correct? My wife is about to switch from AT&T to Verizon, along with me, and maybe there's some wiggle room there I'm not sure,....sorry I'm all over the place here! Irregardless, I'm available for an upgrade June, 2013. Now, I can assure you that I'll wait the four months for the iPhone 6, to take advantage of that upgrade. I'm also on unlimited data, grandfathered in as they say, man I'd like to somehow keep that,..........
  • I bought my 4s right after launch day last year and AT&T says I can purchase at full retail and that I might get a discount in May '13. I've always received and early upgrade rate in the past (though I don't really expect one as I know they fork over a lot of money for the phone and I have a discount rate on my bill through my employer). This isn't the full upgrade discount but cheaper than full retail. Anyway, I noticed an interesting thing when I checked my eligibility on the Apple Store app. There it says that I can pay full retail price but on the anniversary of my 4s purchase, the price drops to the early upgrade rate - $200 less than retail. This is the price I was hoping for when I checked on AT&T.
    So, if you haven't checked already, try the Apple Store app and see if you can get the lower rate by wait a few weeks.
  • what your not understanding Allyson Kazmucha
    is that we should expect it why should we you say? because AT&T gave us full upgrade pricing every single year accept this one.. so why shouldn't I expect it.. They did however give is "early upgrade pricing" which is 250 less then full retail...
  • Well, how come I have to get a NEW 2 year contract when I pay the stiff penalty for upgrading early then? Aren't I paying my way out of having to have a contract then? Seems like AT&T (in my case) is having it both ways. What gives? EDIT - nevermind. We're screwed. Face it.
  • The early upgrade pays off your phone you have now. Then you get the discounted new phone and that requires a new contract. If you pay off your car, you don't think you can get a new car without a new loan, do you?
  • Not that i want to spend more, but when you look more closely at the operating P&L of the wireless carriers, they are not raking in the profits. Building and maintaining the systems is very expensive. Manning the call centers to answer simple questions that customers are too lazy or stupid to look up on line costs a lot. I don't work for a carrier, but I've studied them closely. I don't have the figures handy, but you'd be surprised to learn that when you call ATT or VZ it probably costs them over $10- to talk to you. want more bandwidth, faster downloads? It all costs money. I think some users are spoiled expecting free upgrades. The last time that I was in Europe, customers paid the real price for the phone up front. Only in America. By the way, i always have the newest iPhone and I always sell my old phone for as much or more than I pay for the new model. It's not rocket science.
  • Just called ATT retention department and asked to cancel my account, when the rep asked reason why I said it's cheaper to move to different provider than staying. She was kind enough to wave $250 fee and iphone 5 was only $199. Thank you ATT
  • And what if they had canceled you? Then what? You'd be stuck without that number.
  • Thanks for the article. While I want an early upgrade just as much as the next guy (I'll be paying subsidized price + $250 to go from the 4S to the 5) I can't stand the sense of entitlement some people have. Some people don't seem to understand what it means to sign a CONTRACT and honor the COMMITMENT they made.
  • I currently have an iPhone 4S.  My wife has an iPhone 4.  My daughter has a slider type phone.  Currently, my wife is eligible for an upgrade.  However, I am not nor is my daughter.  But here is what I would like to do:
    Upgrade my wife's phone to the iPhone 5 - however, she doesn't want nor need that much technology.  So therefore I would like to take that phone as mine.  Then I would give her my iPhone 4S - she would like the addtional storage my phone has (32gb vs. 16gb).  Then my wife would give my daughter her iPhone 4 (and we would add a data package to that phone).
    The rep said because of the SIM changes in the iPhone 5, it wasn't physically possible and that Apple is preventing people from doing this.  I can understand if people are trying to use the SIM card from their standard cell phone and put it in an iPhone, but here we're talking about making all the phones iPhones.  They would still get the 2-year commitment for the iPhone 5 and they would be getting an additional revenue stream from the data package that my daughter would have to get for the iPhone 4 she would take over. They said sorry can't do it. And I'm a customer for practically as long as AT&T has had cell phones ( had the blue free McDonald's phone through Pac Bell!). I plan on going into a store as they've always been a bit more forgiving than the phone reps.
  • They could easily do that for you. I think you are dealing with a lazy or uninformed rep. I've done alternate upgrades and equipment changes dozens of times at my local corporate store. I have 3 lines (mine and one for each kid) and ALWAYS take the upgrade (no matter which line is eligible) and pass down my old phone. I think you will have more luck in a corporate store than over the phone.
  • Ginmtb: I've done something similar to what you described above. Last year when the iP4S came out my wife's line was eligible for upgrade however my line was not (we were on a family plan and both had iP4's at the time). I picked up my pre-ordered iP4S at the Apple Store (using my wife's line), and the store rep actually indicated that the sim card swap should work fine. He actually helped us do the swap right there in the store (good ole Apple customer service). Our bill looked a little odd for a few months, didn't look like ATT knew what kind of phone either of us had, but everything matches up correctly now. Not saying that you'll have the same luck at Apple now but you should give it a shot. Worse they can say is no. Side note...now that my wife and I are on staggered contracts it makes it easier for me to get a new phone every year. This time around I'm actually switching my line to Verizon for the iP5 on Friday (pre-ordered already) and will be jumping from ATT with no ETF because now the contract on my line is up (ATT doesn't have LTE in our city yet or I wouldn't be switching to Verizon). Good thing my wife doesn't need the latest greatest iPhone, call me lucky : ) So on Friday, once my ATT iP4S gets cut off, I'll pull the sim card from my wife's iP4 and put it in my old iP4S so she has the more up to date model. Her iP4 will probably go to grandma to replace the iP3 she's had since I don't know when (we gave her that phone too). Crossing my fingers hoping all this goes smoothly on launch day.....
  • It's not as straightforward for them because you have 3 different types of SIM in play. Mini or standard (your daughter's), Micro (you and your wife's), and Nano - for the iPhone 5. So you can't just physically swap them around. They will have to do some activating and deactivating. Should all be doable, just not as simple and the rep might not know the technical side of moving the accounts to the new SIM cards.
  • I thought they were letting me upgrade early because I had 3 phone on my account and paid over $200 a month.
  • Thank you Viggle and Field Agent. If you have a smart phone you should put some of the apps to work for you and make money. Then you can purchase your phones without having to actually pay for them.
  • Here is the issue I have. The two big boys, Verizon and AT&T, are trying to get rid of ulimited data and force everyone onto some kind of tiered plan. I understand why, smartphones are eating up more data and their networks cannot handle it. At the same time it looks like they know there are gadget geeks out there who are willing and able to upgrade every year and pay full price for their devices. If the cost of the voice/data plan is supposed to include the pay-back on the subsidy for the phone I think those of us who pay full price for our phones should get cheaper monthly rates since there is no subsidy to pay back.
  • Yeah my upgrade date is the 25th. It's a no go for any of the phones right now. Guess I would have to wait.
  • Thanks for putting Leanna in her place. Switching carriers can be a PITA, and if you value your time, it's probably not worth the hassle.
  • She was encouraged to switch by LTE anyway, and I would to if I didn't have so many lines.
  • How much did ATT pay you to write and post this article? AT&T does not lose money subsidizing an iPhone every year. They actually rope you into a contract and charge you more for services than any other carrier. While it may be true AT&T may not lower your upgrade fee or eligibility date because of policy, they can, and I my case did, credit me the difference on my bill if I would preorder over the phone that instant when I called asking what my etf fee was. I explained that it was cheaper to switch to verizon, that Verizon had better lte coverage and that I prefer AT&T but was willing to pay my etf and switch had they not credited me the difference. First off, I did not ask for this nor did I demand that they change my upgrade status. I simply explained that it made sense to switch and that I would hope that AT&T would value me as a customer as much as I value there service over the competition. They could get 24 more months of me paying a minimum of $120/mo or they could have my $225 etf. They chose to keep me as a customer and credit me the $250 as long as I preordered the iPhone 5 that instance over the phone. We both are happy, they get there contract extended and I get a new iPhone after owning the 4s for a year.
  • Thank you Ally, for injecting some common sense into this blog. A contract is a contract, not a "I feel entitled to renege whenever I want to" contract. If you don't like the terms of the contract, don't sign it!
  • This is a great post. I wish carriers would send such information to their customers. I've been in my local carrier's store waiting in line to have my phone serviced and watched angry customers explode at store reps becuz they felt the carrier "owed" them an early upgrade. It's ridiculous.
  • That's fine with me. As soon as I install iOS6 tomorrow, the only thing I will miss from the iPhone 5 are the Sapphire, 4" screen, and LTE. Those aren't enough for me to pay full price for an iPhone 5.
  • Didn't you win your 4S from here last year? ;) If so, you should be able to upgrade... unless you'd rather wait out for a "5S"