Thinking about upgrading to the new Apple iPhone 5 or Samsung Galaxy S smartphone? If you’re like many consumers, you might be waiting for your cell phone carrier contract to expire so you can take advantage of special renewal offer discounts. But now, many providers like Verizon and AT&T are offering early upgrade programs.
Early upgrade programs are designed to help consumers get a new phone on a regular basis without breaking the bank, while also guaranteeing that they don’t change to a new carrier once their contract’s up. This new model also helps phone carriers minimize the cost they incur when subsidizing phones for their customers.
So are early upgrade programs really the cheapest way to get a new smartphone? Let’s talk about whether you should join your carrier’s early smartphone upgrade plan.
Upgrades! Upgrades for Everyone!
With most cell phone plans, consumers get to enjoy their device for about a year or two before they’re able to trade it in for a discounted or completely free new device.
The carrier subsidizes your nice, new phone and in exchange, you have to renew your contract for a couple more years.
But now that smartphones are affordable to the everyday consumer — and companies like Apple, Microsoft and Samsung release newer and better phones almost every month — upgrades have become more important to consumers. Many companies now offer phone upgrades at 20 months instead of 24.
Since Android has risen in popularity and affordability, the market for smartphones has become more or less saturated and fewer people are upgrading their devices overall. In fact, last year saw about 9% fewer upgrades than the year before, and that number is expected to keep dropping.
Smartphone Carriers Introduce Early Upgrade Plans
To boost sales and contract renewals, providers like T-Mobile, Verizon and AT&T have all introduced the early upgrade option for customers.
Under the new program, most users are able to spread the cost of a new phone out over the course of several months.
Monthly installments make the cost easy to handle, and the phone gets the full price of the handset back in addition to another 20 or so months of service.
Another early upgrade option offered by most carriers involves upgrading after just a year for a reduced cost.
Suppose you’ve got your eye on that brand new Samsung Galaxy S4. It’s a bit pricey at around $600, but an early upgrade plan can see you paying around $300 for one.
This way, the carrier gets about half of the phone’s retail cost back along with your continued service.
So Is It Really Worth It?
The is yes, if you’re what’s called a “power user.” If you’re constantly using your smartphone and you love having the latest mobile gadgets, these early upgrade plans are a convenient, affordable way to get a new smartphone.
But if you’re a more casual smartphone user and your old iPhone 4 still works, you might be better off saving your money and waiting until your current contract expires.
What about you? We’d love to hear what our Scambook readers think of this early upgrade program. Let us know what you think in the comments!