New iPhone buying options


Last year we saw the introduction of device installment plans like Edge and Next from Verizon and AT&T to shift away from the traditional 2 year subsidized contracts. This year, the iPhone cycle will see even more dramatic changes as that contract option fades further. The result is some interesting and confusing options for customers.

To kick things off, Apple is offering a trade in financing program that promises a monthly fee and yearly upgrades. The financing is actually a 24-month installment loan from a third party. It also includes Apple Care+ and costs around $5 more per month over a straight 24 month interest-free payment. It also requires you to purchase at an Apple retail store, likely to facilitate the exchange of your old device and perhaps keep a lid on the secondary market. During the pre-order window, Apple will offer launch day reservations to pick up your phone. I'm curious how things will work after 12 months if you get a new phone. Since the loan is serviced by a third party, how will the balance of the loan be repaid? Will customers get a check? Will Apple remit payment for the balance?

Another option is Apple will continue offering AT&T Next plans. Verizon seems to still only be done in stores at least for this year. These terms are basically an interest-free installment loan offered directly by the carriers. If you have a device on repayment, depending on any promotions, you may be able to upgrade early with a trade-in, or you can just pay the balance of your device loan.

Lastly, Apple will offer customers the option to pay the full retail price of the device. I think this may be the first time Apple offered to sell phones at launch at full retail since the original iPhone. Since then, if memory is correct, launch day purchases required a contract or more recently device loan with a carrier. Still, presumably to keep a lid on boxes getting resold not he black market, Apple appears to be requiring purchases be attached to a wireless account. It would seem these phones are unlocked, however, which would be nice if you choose to resell it yourself down the road.