AT&T follows Verizon, lengthens device upgrade period to two years
It would appear that AT&T iPhone users will have to wait a bit longer to upgrade to their next handsets, as the carrier announced on Sunday that it will be extending its hardware upgrade cycle to a length of two years.
Source: Engadget
Beginning June 9, AT&T customers with contracts ending on or after March 1, 2014 will have their upgrade qualification time extended to 24 months, the carrier said on its official blog. Prior to the policy shift, customers were eligible for an upgrade after only 20 months.
Previously, Engadget reported on the switch, citing a leaked memo provided by an anoymous source.
The shift, which applies to all devices sold by the telecom, will also affect all new AT&T customers. However, the new upgrade period will not affect Corporate Responsible Users with contractual upgrade terms.
AT&T notes the policy change will bring upgrade cycles in alignment with its two-year long contract terms. Verizon, AT&T's chief rival, made a similar decision early in April, noting that doing so was in keeping with the way consumers buy devices.
"In alignment with the terms of the contract," Verizon said in a statement at the time, "customers on a two-year agreement will be eligible for an upgrade at 24 months vs. today's early upgrade eligibility at 20 months."
It seems AT&T is following Verizon's lead, as the two carriers' policies will take effect over the same time frame. Verizon is making the change for contracts starting in January of 2014, while AT&T's shift is scheduled to follow just two months later.
Consumer desire for the latest and most advanced mobile devices is what draws them to the larger carriers, but those devices are expensive. Consumers typically do not want to pay the full cost of an iPhone or similar device up front, so carriers offer subsidies which they must recoup over the life of a contract. Competition in the wireless segment is increasing, though, and the carriers are now more interested in making sure that their customers stay with them as long as possible.
Apple's iPhone is AT&T's best-selling smartphone and has been for some time. The carrier sold 4.8 million iPhones in the March quarter. In that same quarter, AT&T added 296,000 new contract subscribers, though most of those were new tablet customers, and lost 69,000 phone customers.
Source: Engadget
Beginning June 9, AT&T customers with contracts ending on or after March 1, 2014 will have their upgrade qualification time extended to 24 months, the carrier said on its official blog. Prior to the policy shift, customers were eligible for an upgrade after only 20 months.
Previously, Engadget reported on the switch, citing a leaked memo provided by an anoymous source.
The shift, which applies to all devices sold by the telecom, will also affect all new AT&T customers. However, the new upgrade period will not affect Corporate Responsible Users with contractual upgrade terms.
AT&T notes the policy change will bring upgrade cycles in alignment with its two-year long contract terms. Verizon, AT&T's chief rival, made a similar decision early in April, noting that doing so was in keeping with the way consumers buy devices.
"In alignment with the terms of the contract," Verizon said in a statement at the time, "customers on a two-year agreement will be eligible for an upgrade at 24 months vs. today's early upgrade eligibility at 20 months."
It seems AT&T is following Verizon's lead, as the two carriers' policies will take effect over the same time frame. Verizon is making the change for contracts starting in January of 2014, while AT&T's shift is scheduled to follow just two months later.
Consumer desire for the latest and most advanced mobile devices is what draws them to the larger carriers, but those devices are expensive. Consumers typically do not want to pay the full cost of an iPhone or similar device up front, so carriers offer subsidies which they must recoup over the life of a contract. Competition in the wireless segment is increasing, though, and the carriers are now more interested in making sure that their customers stay with them as long as possible.
Apple's iPhone is AT&T's best-selling smartphone and has been for some time. The carrier sold 4.8 million iPhones in the March quarter. In that same quarter, AT&T added 296,000 new contract subscribers, though most of those were new tablet customers, and lost 69,000 phone customers.
Comments
lovely. /s
It used to be 18 months, then 20 months, I guess why wait, just jump to 24.
4 months doesn't seem like much but that's millions of dollars in extra revenue.
Looks like corporate customers get real contracts while individuals just get policies that allow the carriers to screw them however they want.
[quote] Verizon, AT&T's chief rival, made a similar decision early in April, noting that doing so was in keeping with the way consumers buy devices. [/quote]
If this is the way we buy devices anyway, why do they need to cram it down our throats?
I am so sick of carriers screwing their customers while telling them they are doing it to better serve them.
Better yet, buy it outright and avoid AT&T entirely. Straight Talk or Net10 will be about half the price of AT&T.
I think this is an example of not seeing the Forest for the trees
I'm sure it does, I agree. Hence the "adding value to shareholders" line.
Except you're still paying the same monthly price for voice and data as people who subsidize. They'd rather you do that because then they're getting even more out of you. Would be nice if you got a cheaper monthly rate if you bought the device up front though. I may be mistaken but I think T-Mobile actually does do this.
Quote:
Originally Posted by ndirishfan1975
With the new policy it makes it much easier for me to jump ship ... I think this is an example of not seeing the Forest for the trees
This is a really dumb move on AT&T's part. It's all about revenue - that's four more months of subsidizing a phone that was already paid for in the first 20 months.
Quote:
Originally Posted by RedRaider2011
Would be nice if you got a cheaper monthly rate if you bought the device up front though. I may be mistaken but I think T-Mobile actually does do this.
I've been contemplating switching to T-Mobiles plan because of the very reason they offer a cheaper monthly rate and you can just buy your phone outright.
The only thing holding me back was that I would have to hang onto my iPhone 4S for four extra months in order to cancel my AT&T contract... looks like AT&T took care of that problem for me.
I don't see the issue really, I'm six months out of contract because the iPhone 5 was too soon and I can wait for the 5S. Apple's one-phone-per-year plan fits this model nicely. Once you get on schedule you are only skipping one model of phone... For regular folks that's more than good enough.... I'm still camping on a 3GS here and don't feel like I've missed anything versus the iPhone 5 I got my son when his contract was up.
Well, if your phone breaks, the extra 4-6 months would have made a difference. But you're right, it's best to ride it out to the next update if you can.
Quote:
Originally Posted by Robin Huber
Thought the idea was to keep customers from jumping ship. If you took the early upgrade you were required to re-up. If you wait until contract is up you might be more likely to try another carrier.
This is exactly what I was thinking. I don't see how this policy can do anything other than increase the likelihood that customers will jump ship to other carriers at the time they purchase a new iPhone.
Prediction: next step will be a reduction, and ultimately elimination, of the subsidy.