iPhone Purchase Plan Decision Maker – Now With All the Carriers

Over the weekend I took a look at how much the various iPhone purchase plans compare. That was mostly an exercise is trying to decide what I should do next as an AT&T ‘customer’.  A few people asked me to look at the rest of the carriers as well. It turns out that is not so easy. Only AT&T actually lets Apple list their pricing on Apple.com. So I had to go to each of the other carriers’ websites individually. Logistically this was not a problem, but it did make it much harder to compare each plan directly. As I noted previously, the carriers have advanced their pricing plans from complicated to now fully Byzantine. And I got the sense that each carrier was hiding slightly different things in the footnotes. In particular,  I could not find plans that offered new iPhone models every year as Apple does and AT&T makes wants you to believe it does.

With that being said, I offer up the following comparisons. These include Apple Care, Activation Fees (where the carriers disclose them), and various discounts for service plans. I then discounted these back over 24 months at a 6% discount rate to get the net present value of each plan.

NPV Cost Includes Upgrade?
AT&T Next 537.72 Y
Sprint iPhone Lease 841.89 N
Verizon 927.95 N
Apple Upgrade 934.44 Y
T-Mobile 954.99 N
Sprint Easy Pay 964.18 N
No Contract 993.00 N
Sprint 24mo Contract 1128.07 N
Adj. AT&T Next 1176.25 Y

This time I have sorted from least to most expensive. It shows how confusing all this is that the same AT&T plan is at both extremes of the list. As I noted in the last post, if you have some sort of corporate contract with AT&T or other unending entanglement with them, this plan might make sense. For almost everyone else, the AT&T plan is not a good choice.

After that, Sprint and Verizon both have very competitive prices for the device, but note that neither of these include the option to upgrade to a new phone in a year. That option is truly a luxury, no one needs to upgrade their phone every year, especially since all these plans include Apple Care which allows for phone replacement in the case of damage. On the other hand, it only costs $7 more than the Verizon plan to get the option to do so. Sprint has three purchase plans, the cheapest of which is the lease option, which is worth exploring more. The catch is that as a lease, Sprint retains ownership of the phone. And at the end of the contract you have to give the device back to them which they can refurbish and resell for $200. T-Mobile ends up being more expensive than the Apple Upgrade plan, as do the other two Sprint plans.

As it turns out, the pricing is all pretty close, but that option to upgrade the iPhone after a year, directly through Apple, is very appealing.

One response to “iPhone Purchase Plan Decision Maker – Now With All the Carriers

  1. Pingback: Why Did Apple Launch the Upgrade Program? Apple Care is a big part of the answer – DIGITS to DOLLARS·

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