Thursday, September 18, 2014

AT&T Mobile Share - Cost Effective Phone Upgrades

With the Apple iPhone 6 coming out tomorrow, many people are looking at upgrading. Most people would believe that getting the iPhone 6 for $199 is a good deal. It usually is not because of the hidden costs.

This post mostly applies to those who have switched to the Mobile Share plan which has a shared data cost and seperate per device costs. Voice and Texts are usually unlimited on these plans. This post still applies if you are buying an iPhone 6, iPhone 5c, or even a Samsung Galaxy.

Before we can understand costs, we need to understand what AT&T Next is. In general AT&T Next has many misconceptions even by those who follow the tech world. Here is what AT&T Next really is: It is an interest free loan with low credit requirements for AT&T subscribers. This interest free loan has an option to give you a guaranteed trade-in value for your good condition phone at either 12 or 18 months. There is no reason to take the guaranteed trade, but it's there and you know the value you will recieve at 12 or 18 months upfront. If you get more trade value by selling your phone on Gazelle or eBay, then you can sell it there. If you don't want any value, you may pass the phone to your kids. So let me say that one more time. AT&T will give you a loan for your phone and tell you how much they'll give you for in the future no matter how much it depreciates.

Now how does the mobile share plans actually work? Mobile share charges your account per device. A smart phone costs $40 each, other devices cost less. If you are off contract or buy your own device, AT&T will give you a $15-$25 discount on that phone. Any plan under 10GB of data only gets a $15 discount per month. The larger plans get a $25 discount. AT&T Next is a loan on the full price of the device, it counts as buying your own device. There is no contract on the phone, there is only a loan agreement for repayment. The subsidized plans where iphones only cost $199, not only cost you a full $40/month, but they also carry a $40 activation fee.

So here are the raw numbers based on a 16GB iPhone 6:
Subsidized Phone
  • Phone Purchase: $200
  • Activation Fee: $40
  • Monthly Fee: $40 x 24
Total Cost: $1200

AT&T Next 10GB plan or more
(The Next 12 or 18 plans ultimately cost the same, but the numbers are based on 18 for simplicity)
  • Phone Purchase: $0
  • Activation Fee: $0
  • Monthly Fee: $15 x 24
  • Monthly Financing: $27 x 24
Total Cost: ~$1008

AT&T Next less than 10GB plan
(The Next 12 or 18 plans ultimately cost the same, but the numbers are based on 18 for simplicity)
  • Phone Purchase: $0
  • Activation Fee: $0
  • Monthly Fee: $25 x 24
  • Monthly Financing: $27 x 24
Total Cost: ~$1248

Is the extra $48 worth it for ATT Next? Well first you should consider your plan. If you have 2 smart phones on the 6GB plan, you will break even moving to the 10GB plan. Thats 4GB extra for free. If you have the 4GB plan and you have 3 smart phones, you will again break even moving to the 10GB plan. Additionally if you qualify for any ATT company discounts, the 10GB plan will be cheaper than your 6GB plan. What else does the $48 get you? Well if you want to upgrade in 1 year, or even 1 month, all you need to do is pay off your loan and you get another phone on a new loan. Or some people would rather pay a little extra every month than pay $200 up front.

Not eligible for a full upgrade? Well AT&T will waive that if you switch to Next! Or maybe you're only eligible for early upgrades. Early upgrade pricing changes the Subsidized Phone cost to $1450, which is well beyond the cost of any Next pricing.

Any way you look at it, buying the phone for full price has many benefits over the subsidized pricing. Using the interest free loan from AT&T may also be right for you.

Enjoy your new phone.

No comments:

Post a Comment