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IPhone 5s Verizon 2 year contract

Why Verizon Killing 2-Year Contracts Is Bad for Apple  November 5, 2018 – 09:23 pm
Samsung Galaxy S6Samsung may run into even more problems with the S6, as there are tons of affordable, excellent Android-powered phones.

The problem is, American shoppers have been sold the idea that an Apple iPhone or Samsung Galaxy costs between $100 and $400. Even Apple plays the game: When it revealed the last year, it trumpeted prices ranging from $199 to $399. The words "Two-Year Contract" were tacked on below, almost as an afterthought. Apple's site doesn't even mention contracts when it lays out the same prices.

Even Apple.com lists the carrier-subsidized prices, creating the impression that iPhones are much cheaper than they really are.

Subsidized phones have become so ingrained in the consumer consciousness that most people don't know what an iPhone actually costs. Despite the up-front "discount" you get for committing to a provider, the truth is that you almost always pay the rest of the cost (and then some) in the form of fees and surcharges.

When you think that you're only paying $200 for the iPhone, you're less inclined to consider other options that actually cost $200.

So why all the games? Because when you think that you're only paying 0 for the iPhone, you're less inclined to consider other options that actually cost 0. Though Verizon's CDMA network limits your choice of unlocked phones, we've seen plenty of low-cost, high-performance devices like the 0 . But even if you can get phones like this for "free" with a two-year contract, most people will opt for the apparently only slightly more expensive iPhone.

iPhone 6 PricingCredit: Reviewed.com / Chris Thomas

If consumers know they have to pay the full retail price of the iPhone, will they remain committed to iOS?

With Verizon's new plans, an iPhone either has to be purchased up front ($649.99 to $849.99, depending on storage), or broken up into 24 monthly payments of about $27 to $35 each. You'll also have to pay $20 per month, per line, for unlimited talk and text, and then pay again for a pool of mobile data. The data packages will come in four sizes:

  • Small: 1GB, $30 per month
  • Medium: 3GB, $45 per month
  • Large: 6GB, $60 per month
  • Extra Large: 12GB, $80 per month

While this new pricing structure should save most current Verizon customers money and clarify confusion around charges and fees, it could be a mixed blessing for manufacturers of high-end phones.

iPhone 6 In UseOn the one hand, the apparent cost of entry for top-tier phone ownership has never been lower. With no activation fees, you'll be able to walk into a Verizon store and walk out with a new or with no money down.

Credit: Reviewed.com / Chris Thomas

Google's Nexus program might benefit greatly from these new pricing plans, as they tend to be much cheaper than other flagship phones.

On the other hand, for consumers on a tight monthly budget, the lower cost—whether monthly or up-front—of a or last-gen could be too good to pass up.

Let's take the "Medium" plan above as an example. If you get a new iPhone, you're looking at $80 per month: $20 for the privilege of having a smartphone, $30 for the mobile data, and $30 for the phone itself. That's not unreasonable, but some might be tempted to just pick up a pretty good $300 or $400 phone and pay a mere $50 per month, instead.

Customers who go this route will save every month, and won't owe anything to Verizon if they decide to leave for another carrier. If they opt for monthly payments on a new phone instead, and later find they want to ditch Verizon, they'll have to pay the remaining balance on the phone. It's not as devious as the old "Early Termination Fee, " but the effect is the same.

Google Nexus 6Credit: Reviewed.com / Chris Thomas

Motorola's Moto G is a particularly interesting option, as you can have a low monthly bill and a very nice little smartphone for less than $200.

But even in the latter scenario, Verizon's move is a win for consumers. It will help most shoppers save some money, doesn't lock them into a long-term contracts, and takes some of the guesswork out of purchasing a new phone. It's also entirely optional for existing Verizon contract customers, according to the AP, though there is very little reason for anyone to stick with the old subsidized sales model.

Ultimately, Verizon's move to finally end two-year contracts is a sign that the times are changing. The company may have been backed into this corner by aggressive rivals like T-Mobile and allegations of deceptive billing practices, but the whys don't really matter for consumers. While Verizon's plans are getting simpler, life for Apple, Samsung, and other big brands just got a whole lot more complicated.

(Editor's Note: This article was updated to correct an error with regards to Verizon's new pricing. We regret the error.)

Our editors review and recommend products to help you buy the stuff you need. If you make a purchase by clicking one of our links, we may earn a small share of the revenue. Our picks and opinions are independent from any business incentives.

Source: smartphones.reviewed.com

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