Why Apple's iPhone Upgrade Program Is a Bad Deal For Most

Mark Wilson writes: You may have heard that Apple had a little get together today. There were lots of big launches — the iPhone 6S, the iPhone 6S Plus, and the iPad Pro. Those waiting for an iPhone fix were given quite a lot of get excited about, but like your friendly local drug dealer, Apple has a 'sweetener' to help ensure its customers just keep on coming back for more: the iPhone Upgrade Program which lets you upgrade to a new iPhone every year as long as you keep paying each month. On the face of it, it might seem like a good deal — particularly as the price includes Apple Care — but is that really the case? What Apple's actually doing is feeding the habit of iPhone junkies, keeping their addiction going a little bit longer, and a little bit longer, and a little bit longer. In reality, Apple would like you to perma-rent your iPhone and keep paying through the nose for it. Ideally forever.

Comments

Get used to it, this is the future

[Aboroth]

Monthly payments for everything you use and pretend to own! From your music you listen to, to the movies you watch, to the software you use, to the storage space on the cloud where you keep all your data, and the physical hardware you pretend like you own. Pay for everything in your life, for the rest of your life! What a deal! Fall on hard times for a few months and miss a few payments, and watch your whole life disappear! Weeee!

Re:Get used to it, this is the future

[MasseKid]

Or put away a little money every month so when you fall on hard times? Although if I could really turn off and turn on the more expensive parts of my life at no penalty when I needed extra dough that would be kinda sweet.

Re:Get used to it, this is the future

[phantomfive]

What we really need is a payment program that will pay for payments.

Re:Get used to it, this is the future

[LaurenCates]

I can't imagine why this has suddenly become a thing. Outside of Netflix, which I understand, since movies are a way different beast than software and music.

If there's one damn thing right my parents taught me, it's about owning my own shit. Get things paid off as quickly as possible so that it's yours, and you don't end up dependent on anyone or anything for the thing you've paid for, especially if it's something you need on a moment's notice.

I've had to explain to more than one person that "the cloud" is a cute as hell idea, until "the cloud" is down for a few hours, or gets hacked.

Re:Get used to it, this is the future

[thedonger]

I can't imagine why this has suddenly become a thing.

It isn't sudden. Gyms have been on this train for years. New car salesman want you to "buy" a new car every three years. Make the monthly payment part of life, and people forget it is there -- it becomes the baseline. And it allows them to make more accurate revenue projections.

Re:Get used to it, this is the future

[mccalli]

That is called 'insurance'.

Re:Get used to it, this is the future

[phantomfive]

Insurance only pays for payments when things go wrong.

Re:Get used to it, this is the future

[Anonymous Coward]

But you need to pay for your insurance too. Can I get my insurance insured?

Re:Get used to it, this is the future

[CastrTroy]

Personally I'm OK with paying for a music subscription. There's so much music out there, that I couldn't hope to own even a tiny fraction of the good stuff if I was buying everything by the album. Music services cost about $10 a month. For that I'd be lucky if I could buy a single album every month. After 10 years of buying 1 album a month, I would still only have 120 albums. That's a pretty small selection of music as far as I'm concerned. Esepcially when you consider that you wouldn't always select the best option 100% of the time. After 10 years, probably only 80% (96) of the albums would be worth listening to. And that's being generous as far as how good I am at picking up albums. Then there's the problem of multiple good albums coming out in the same month. Do you buy 3 albums one month, and spend a lot of money, leaving you with no new albums for the next 2 months? Or you could just pay $10 and have access to just about everything.

Right now, my only complaint is that they don't have absolutely everything. I think there would be a decent market for a service that cost $20 and had absolutely everything, but the music labels won't let that happen. It would probably even be a good deal at $30. Same goes for Netflix. I would probably pay many more times the current rate if they had everything. $40 or $50. Most people were/are paying more than that for cable already, and they still weren't getting everything.

I think that all media bought on subscription is a pretty good deal, provided it makes it cheaper to access more. Personally I don't ever tend to read a book more than once, because it takes so much more time than any other kind of media, and there's just so much good content out there. I really don't see any value in owning a book.

Re:Get used to it, this is the future

[Anonymous Coward]

I can't imagine why this has suddenly become a thing.

It isn't sudden. Gyms have been on this train for years. New car salesman want you to "buy" a new car every three years. Make the monthly payment part of life, and people forget it is there -- it becomes the baseline. And it allows them to make more accurate revenue projections.

Gyms I can understand...it can be cost prohibitive (and even more space prohibitive) to own even a fraction of the different types of equipment you may use in the gym. But if you are the type that just goes there to use the treadmill or the stationary bike, then you're probably better off getting one for home.

Re:Get used to it, this is the future

[Anonymous Coward]

and not always even then, as they have certain conditions attached

Re:Get used to it, this is the future

[mccalli]

Yes. It's called re-insurance.

I imagine there's re-re-insurance as well. And re-re-re-insurance. But who re-re-re-re-insures th re-re-re-insurers? That's the burning question that I want an answer to, anyway.

Re:Get used to it, this is the future

[Anonymous Coward]

Not everyone has something to put away every month. That's a form of planning and most people are bad at that.

For those people, I'm sure there will be a service where you can sell your acquired life to make a fraction of a cell phone payment to stay on facebook for a few more days. After all, when someone stops posting to facebook for a week, they're obviously dead.

Re:Get used to it, this is the future

[njnnja]

Although I dislike the "rent everything" future as much as you, it makes sense, even if you don't assume that these companies are blood sucking greedy vampires. The basic problem is that economies of scale are tremendously high for most modern goods. Once you create the master track (at great expense), distributing music to millions has never been cheaper. Once you invent the iPhone 23 (at great expense), slave labor in the far East builds them for $100 each. This is different from even highly capital intensive industries like automobiles where 50% or more of the cost to a consumer is just the raw materials.

In this world, if you view the "thing that is purchased" as the individual item, like a single song, then in the long run it will be hard for companies to charge anything at all. But if the "thing that is purchased" is the entire system, such as the entire music industry (or a large part of it), or the Apple smart phone industry, then those initial costs get factored in and the price to consumers doesn't go to zero.

It is an interesting response by companies to the digital economy, and may just be during a transition period before a true post-scarcity digital world.

Re:Get used to it, this is the future

[Anonymous Coward]

Buying something on credit has been around for several decades. It does have advantages - you get something you can use now rather than having to save up for 5 years to pay for it. When it's something that's a near-necessity (fridge, oven, computer for your work etc) that's extremely useful. It's not any different to getting a loan , using it to buy the $thing and paying it back over X months. And of course the lender makes a small profit, but you're happy to trade a little extra money for the convenience of having it sooner.

The *new* thing is the subscription model. It used to be at the end of the term you owned the thing outright. With the new model you don't, you either keep paying, upgrade, or hand the thing back. Which means it costs you much much more in the long-run, which is why the companies like it so much, and you never have the asset to sell at the end of its life to subsidise the next model. The only good thing for the consumer is that it probably means lower monthly costs, because the lender keeps the value of the asset at the end and are keeping you for longer, so it's still profitable for them.

Re:Get used to it, this is the future

[torkus]

So you're actually *complaining* that the carriers finally separated out the cost of the phone from the cost of their service?

Re:Get used to it, this is the future

[Anonymous Coward]

Yes, you can. Insurance companies do it: https://en.wikipedia.org/wiki/Reinsurance

Of course, the little guy would have to give something up to make insurance^2 work. Like after a year of solid payments, the insurance^2 would cover a missed month at a cost of 25% ownership in the insured service, associated data, people, etc. If the end user can't make their payments for 4 consecutive months, the insurance company could then liquidate the service, data, people, etc and retain all proceeds.

And yes, the ownership of people would need a good marketing campaign to fight against those who would label it as slavery.

To keep this on topic, in the future, the iPhone will be the legal entity and the person will be a resource committed to the iPhone.

Re:Get used to it, this is the future

[edtice1559]

If you can't put a few dollars away every month you shouldn't be buying iPhones or music subscriptions. I'm sure somebody will respond that having the latest phone is an entitlement and the government should be distributing them to everybody. As a society, we have a real inequality issue and I'm sympathetic to those who can't afford to participate in our shared culture. And that does, these days, include things like newer smartphones. That being said, if you are in that unenviable position, the solution is not to put on a veneer of wealth at the expense of your long-term financial well-being. You still need to live within your means.

Re:Get used to it, this is the future

[ruir]

Gyms are a scam. The point is that they count on the people that buys the service on the impulse and rarely if ever set their feet there, hence the automatic monthly payments and the obligatory period.

Re:Get used to it, this is the future

[edtice1559]

Buying something for a one-time payment vs. paying a monthly fee *feels* like a smarter financial decision. But it isn't necessarily. Most things that you buy are very non-liquid (hard to sell) and depreciate quickly to zero. If you go out and spend $500 on a phone, you *feel* like you didn't really spend that much money. You used to have $500 in cash and now you have a $500 item, so you really just traded one asset for another of equal value. But this is just a psychological effect. Unless it's a piece of capital equipment that you are going to use for generating revenue, it's really an expense incurred immediately. If you wouldn't do the monthly rental plan, you probably shouldn't purchase the item. So if the offered monthly rental doesn't feel as emotionally good as an outright purchase, that's just psychology. You probably should neither buy nor rent the item.

Re:Get used to it, this is the future

[ruir]

This goes deeper than this. With the subscription model they can finally sell the same music multiples times to the same extended family, and make you pay multiples times for the same media content every time the technology changes. And create a far more efficient artificial scarcity model than you have nowadays.

Re:Get used to it, this is the future

[CastrTroy]

This is especially true since there are so many cheaper ways to get exercise. My local arena charges $2.50 to go skating. You can take a walk or go for a run basically for free, you just need a pair of shoes. Cycling can cost a bit more to get started, but you can get a working bike for not too much money off Craigslist, and it costs nothing for you to ride it.

You can get some decent exercise for just a fraction of what a gym membership costs. If you want to lift, pick up some cheap dumbbells from walmart and get started. Sure it won't be sufficient for the fitness maniacs who like to spend 10+ hours at the gym every week, but they are probably getting their money's worth from the membership. If you just want to get in shape, and do some mild exercise, it costs almost nothing. I never understood why anybody would want to pay for a gym membership and then never use it when there are so many better options.

Re:Get used to it, this is the future

[kurkosdr]

I can't understand what the "author" is babbling about. iPhone's have the best LTS from any other mobile OS. Devices get upgrades for a long time (compared to many "open" Android phones like the relatively recent Galaxy Nexus which has no official support for the latest version of it's OS), and even after they don't receive upgrades, they do not stop working. I see people with iPhone 4 phones still using them. But if your lifestyle demands having the latest and greatest iPhone, Apple will offer you a service to "assist" in that. In no way is this an indication that "evil apple doesn't want you to own your device". But you see, most people here secretly hate people who can afford having the newest, and try to spin them as "sheeple".

Re:Get used to it, this is the future

[Grishnakh]

Sounds good to me. After all, people seem to actually like this "ownership" model, and even though it's great for corporate profits, consumers seemingly agree that it's a great deal and are lining up to sign their names on the dotted line.

PT Barnum would be proud.

Re:Get used to it, this is the future

[Grishnakh]

You can preach this stuff about living within your means to people all you want, but they're not going to listen, especially people at the bottom who, as you put it, can't afford to participate in our shared culture. We've seen it over and over again, where someone from a poor background hits it rich (usually through sports or music fame), lives high on the hog for a while, and then goes bankrupt after their fame disappears.

Re:Get used to it, this is the future

[ProfBooty]

People's lack of impulse control, and future time orientation allows others to become rich, from stockholders, to stock buyers.

Re:Get used to it, this is the future

[ceoyoyo]

It hasn't suddenly become a thing. People have been leasing cars forever. This is the same thing. I know people who get a new car every two years. They like having new cars, and lease programs are designed for them. There are some people who want the latest shiny at all times. If you're one of them, this phone lease program will make it a bit cheaper for you to do that. If you don't replace your phone every year then this isn't for you.

The insidious thing is the cell provider model of obscuring the fact that you're leasing a phone by bundling it with the connectivity itself. Kind of like if the only price a car dealer would ever advertise was the downpayment, and your actual lease payment was bundled with the cost of gas.

Re:Get used to it, this is the future

[Grishnakh]

No, gyms are not a scam. *Some* gyms are definitely a scam (LA Fitness, I'm looking at you), but that's because they've adopted a scammy business model, not because they're a gym. There's plenty of gyms which are not scams; YMCA is a good example of one.

Unfortunately, yes, a lot of gyms (mainly the corporate ones) do profit a lot off people who sign up thinking they're going to use the service, and then rarely bother to go in. However, for people who actually use them, gyms are useful because most people can't afford the equipment (or the space to store it) that they have at a gym. A typical weight-training circuit at a gym can have you using 10 different machines within 20-30 minutes. You'd need a large basement to hold all that equipment, plus thousands of dollars (probably well over $10k) to purchase it in the first place, and good luck moving that stuff.

Of course, as someone above said, if all you do there is use an exercise bike or elliptical machine and nothing else, you'd be better off just buying your own. But if you have a gym membership, it makes good sense to make use of the weight machines, because you don't get strength training from aerobic machines.

Re:Get used to it, this is the future

[qwijibo]

Netflix pays royalties based on what movies get watched. The more people who watch something, the more the producer gets paid.

I'd definitely agree that a monthly entertainment expense would be popular if a similar model was used across content providers. If Amazon has content that Netflix doesn't, it would be nice to not have to pay two subscriptions to switch between them.

Likewise, if both have the same content but one has a better content delivery, the one that serves the customers best should get paid more. Screw Netflix's bad download rates that can be gotten around by stopping and restarting the video from a different server. That shows that their infrastructure, not my connection is the limiting factor.

Same thing could apply to free services like youtube. Skip the lame commercials and take a slice of that $50/month pie for those who produce good content. I don't think most people are against paying for something they like, but when it's a lot more work for the user, it's not going to happen.

Of course, the problem is that companies that provide content want the fixed monthly fee so they have a budget to work from. It's a lot harder to run a business if you don't know how much you can invest in infrastructure, content, etc. Companies like Netflix and Amazon would have to work together and pool resources to make it mutually beneficial. Oh wait, Netflix runs on Amazon Web Services already.

Subscriptions for services make sense and most people are used to these. Subscriptions for physical objects like phones just seems like a way to feed junkie consumerism. While addiction is a great thing for the bottom line, I think there's an adverse affects on the way people act in many other parts of their lives.

I like that when something is paid off, the Total Cost of Ownership keeps going down. Many things in life benefit from the not-disposable mentality. I take care of my phones and they last a long time and stay in good condition. This is just a matter of common sense to me, even though my employer pays for my phone entirely, so I don't actually save a penny on not smashing it every time a new one comes out. Other people seem to have 'accidents' within weeks of new phone releases, but that usually appears to be part of a larger pattern of poor decisions.

Re:Get used to it, this is the future

[willworkforbeer]

That's a form of planning and most people are bad at that.

To be fair, it *is* on my to-do list.

Re:Get used to it, this is the future

[PopeRatzo]

As a society, we have a real inequality issue and I'm sympathetic to those who can't afford to participate in our shared culture

What if not participating in our shared culture prevents you from improving your financial situation? What if that "shared culture" was specifically designed to increase inequality?

We're creating a digital divide that's more effective than a fence at the border when it comes to keeping out the "undesirables".

Re:Get used to it, this is the future

[Grishnakh]

And of course the lender makes a small profit, but you're happy to trade a little extra money for the convenience of having it sooner.

These days you can get some loans that are very close to 0%, or even actually 0%, on cars. Between the low prime rate and the soft market, I'm guessing carmakers are doing everything they can to get people to buy new cars. By contrast, buying a used car means getting a loan for much more than 0%, so you'll get socked with a lot more interest when you buy used (which of course is offset by the lower purchase price), unless you pay cash.

Re:Get used to it, this is the future

[PopeRatzo]

What we really need is a payment program that will pay for payments.

That's called "income" and for most people, it's shrinking.

Re:Get used to it, this is the future

[Anonymous Coward]

If you can't put a few dollars away every month you shouldn't be buying iPhones or music subscriptions. I'm sure somebody will respond that having the latest phone is an entitlement and the government should be distributing them to everybody. As a society, we have a real inequality issue and I'm sympathetic to those who can't afford to participate in our shared culture. And that does, these days, include things like newer smartphones. That being said, if you are in that unenviable position, the solution is not to put on a veneer of wealth at the expense of your long-term financial well-being. You still need to live within your means.

A few years ago I was a mentor at a local high school. I was assigned a kid and we would visit, talk, do homework, etc. I tried to mainly be his friend. One visit he was bragging about going to a rent to own place to buy a 55" tv. I tried to turn it into a math problem and show him how he was going to be paying for the TV for a year and the $800 TV would cost him something like $1500 all said and done and how if he just made payments to the bank for 6 months he could go buy the tv outright and probably a newer model. He looked at me and said "But I wouldn't have the TV for 6 months" he ended up buying the TV. :(

Re:Get used to it, this is the future

[ColdWetDog]

Yes. It's called re-insurance.

  But who re-re-re-re-insures th re-re-re-insurers? That's the burning question that I want an answer to, anyway.

You do. It's always that way,

Re:Get used to it, this is the future

[Grishnakh]

The problem with your analysis is that there *aren't* any good albums coming out every month. All the good music came out in the 60s through 80s; everything coming out now is corporate-produced, Autotuned shit, except perhaps for a handful of bands which started back in the 70s or 80s and somehow are still alive and kicking and touring and making music.

Re:Get used to it, this is the future

[ibwolf]

You are forgetting about the cost of leasing/renting. Yes, if you can either pay 500 dollars now or pay 50 dollars a month for 10 months, you are better off with the latter. But that is almost never the case. It is more likely to be 50 dollars a month for a year (600 dollars total). You pay more to pay later.

Of course, in some cases, as with American cell phone contract (at least until recently,) the two options are rigged so that the monthly plan is equally cheap or even cheaper. This is usually done by conflating it with some kind of service and/or erecting hurdles to outright ownership.

Re:Get used to it, this is the future

[NatasRevol]

Buying something on credit has been around for several decades.

Well there's a real eye opener to a lack of historical knowledge.

Re:Get used to it, this is the future

[SSonnentag]

You're completely wrong. Apple does not own the phone. You're buying it on time just like when you buy a car, except you get your car before making a payment vs making payments before getting the phone. If you cancel your upgrade subscription, you keep your phone, meaning it is not a rental.

Re:Get used to it, this is the future

[PopeRatzo]

You can get some decent exercise for just a fraction of what a gym membership costs.

Or, you know...

https://youtu.be/RD_44xEEDjU

Re:Get used to it, this is the future

[Anonymous Coward]

And even some of the gyms that use the 'scam' business model manage to do so without *feeling* like it's a scam. For example, the gym I belong to, costs $19/month for me, my wife, a friend of ours, and her two daughters. My wife and I haven't been in a few months, her because she's been recovering for surgery, and me because that ties up a lot of my spare time, too. The low cost, though, means it isn't worth it to cancel the membership, because we expect to be going back in a few more months at most.

Re:Get used to it, this is the future

[Anonymous Coward]

IMHO, the loan interest is already integrated as a "higher margin" into the main car cost so they can advertise 0% / 1% interest rates.

Re:Get used to it, this is the future

[Grishnakh]

Most things that you buy are very non-liquid (hard to sell) and depreciate quickly to zero. If you go out and spend $500 on a phone, you *feel* like you didn't really spend that much money.

Phones, at least good ones, do not depreciate to zero quickly. Now, you're probably not going to get 90% of the retail value when you resell one, but they do hold their value to an extent, much like cars. Go try to buy a Samsung Galaxy S5 (which is supposedly "obsolete" because of the S6): the prices are about $350 right now. That phone probably only cost $600-700 new, and it's already at least a year old. I just got a Galaxy S4 for $130; obviously a lot cheaper than its new price, but again it shows it does hold its value to an extent. I imagine this curve flattens too: getting an in-demand phone that's 2 years old, and then re-selling it after 1 year, probably won't end up costing you that much, for instance as you'll be able to recoup much of its cost. Notice that, like PCs, phones have gotten to the point where they're pretty much "fast enough", so a 2-year-old model doesn't seem dog-slow compared to new models, and all you're really getting with a brand-new model is probably a higher-res camera and maybe some extra features like NFC. Honestly, I don't see that I'm missing anything with my S4, except the S5's waterproof case. And since the new S6 doesn't even have that any more, nor a removable battery or SD card slot, I really don't see how the brand-new S6 is in any way an improvement over my $130 2-year-old S4.

Of course, unpopular phones probably don't hold their value well at all. But that's not too different from cars. Just look at how poor the resale values on most GM and Chrysler cars are, compared to Hondas and Toyotas.

Re:Get used to it, this is the future

[LaurenCates]

Additionally, there's a social aspect that's associated with going to a gym.

I find I put more effort into it when I'm around other people. Not because I'm particularly competitive, but because I'm there and I'm capable.

Also, classes help me put a structure to my workout routine. I admit I have a problem with severe lack of discipline if left to my own devices, but if someone has a workout ready for me, boom, I'll do it.

And, frankly, I need to leave the house and talk to other people, because even though I'm a grown adult, I have socialization problems. You can go to a bar to be with other people, sure, but if you have problems breaking the ice in random situations, you can always make a comment about the class you just did.

Re:Get used to it, this is the future

[LaurenCates]

In fairness to gyms, it isn't like there are no maintenance costs.

Even if there isn't towel service, someone still needs to mop up all the sweat and dirty floors. And machines go down and need repair. And some of the smaller freeweights tend to wander off. And resistance bands get damaged and broken.

Am I saying that there are no maintenance costs with other services? Of course not. But to say a gym has no need for a consistent inflow of revenue is to tell me you've never actually been to one.

(I will leave the easy jokes lying right there.)

Re:Get used to it, this is the future

[Anonymous Coward]

Actually it is non cost prohibitive, its just people are too damn impatient to either 1. look for deals or 2. don't buy everything at once and 3. unless your training for the olympics you don't need 99.99996 of the gym equipment anyways, its a waste of time and money. Just about anything you need to "have" that has payments is pretty bad, from cars to gym, to leasing Netflix, sorry but Netflix is not a need, its a luxury want.

Re:Get used to it, this is the future

[ArmoredDragon]

That seems foreign to me. I've always been putting a third of my income into savings every month, no matter what my income level, and my income has ranged from very low (12,000 a year) to what some call middle class (roughly 48,000.) Sure I always feel like I'm in a money pinch, but I'm so used to this being my standard of living that it doesn't bother me.

Re:Get used to it, this is the future

[Penguinisto]

As a society, we have a real inequality issue and I'm sympathetic to those who can't afford to participate in our shared culture

.

Dunno... back when I was young and poor, I paid $10/mo for a cheap dialup ISP account (with 200 whopping hours a month access time), and literally *built* my rigs from spare parts and carcasses at the local computer shops (to give you an idea, my very first VGA monitor needed a new capacitor and I still paid $75 for it). Sometimes I'd straight-up barter parts if I stumbled across something useful. While world+dog was using the brand-new Pentiums and 56k modems running a shiny new copy of Windows 95, I was doing just fine on a 14k modem and a 386SX running RedHat.

Even today, it's almost trivial to buy a used smartphone (or even a new one w/ an older spec set), then get a $35/mo Net10/Tracfone plan. You won't have all the shiny goodness like the guys with the just-released iPhone and the $100/mo Verizon plan, but it's enough to get what you need. Even as late as last year, I used a Huawei 880c that I paid $100 for off-contract, and paid $45/mo for a 3G Net10 plan. You can get an equivalent low-end smartphone right now at the nearest Wal-Mart for like $50 at most. Give the cheapness of it all, it's almost doable on minimum wage.

I think that's what GP and etc were talking about - you can still get the participatory bits of it all, without blowing a zillion bucks to do it. Unfortunately, too many folks who cannot afford it go get the Galaxy/iPhone shiny stuff not because they need it, but because 'status'.

Re:Get used to it, this is the future

[edtice1559]

If these were capital equipment purchased for business purposes (Perhaps you run a business that tests Android apps for a fee), this would be a reasonable accounting method. Assume three year linear depreciation or something along those lines. That's not my point, though. In your example, I buy the device for $730 knowing that a year later I could sell it for $365. Or I could rent it for $1/day for a year. Both are the same from a financial perspective. In the first scenario somebody will say "ut I own it." Yes and in the second scenario you could rent it for a year for $365 and then buy a used one at the end for $365. You're slightly ahead in the second scenario since you could have earned interest on the $365 in your pocket. Of course in real life, you won't get this deal. The lease will end up costing $1.10 / day or something. Given the two scenarios the outright purchase *feels* better to most people, but it's simply not significantly better if the rental price is reasonable. The OP to which I was responding was pointing out that, in the rental scenario, you don't *own* anything in the first scenario. My point is that it doesn't make a difference. At any time after purchase the device will have less value than when the purchase was made. Renting from initial time x to x+1 for approximately the depreciation cost during that time is the same, financially, as owning. Since these devices eventually go to zero after some time, lets suppose it's three years, this means that a three-year rental for the full price of the device is no different than owning. You might say that at the end of the ownership scenario you have a device that's worth nothing where as at the end of the rental you have nothing. And, of course, you can use a device worth nothing. With the rent, you are forced to rent again. But this isn't true as exhibited by the fact that used iPhone 3s are available for free or $5 (essentially free) at the local Salvation Army store. The only time that owning is beneficial over renting is if the item in question has the potential for capital appreciation (going up in value). Buying a depreciating asset isn't any better financially than renting a depreciating asset at a reasonable price. But it *feels* better which is a problem because it leads to poor decisions.

Re:Get used to it, this is the future

[Dr_Terminus]

Sounds like someone isn't looking hard enough for good music. There are seriously so many good groups out there now, whatever your tastes are, that its hard to believe anyone when they claim that all the 'good music' come out in the 60s-80s. That to me says they are either very closed minded, or just listen to the crap on the radio.

Re:Get used to it, this is the future

[edtice1559]

I'm not forgetting it. I'm just saying that renting vs. buying you should figure out the net present value of the (negative) cash flows that you will have over the lifetime of use. The fact that you "own" it (whatever that means) doesn't figure into the calculation. On that part we seem to agree. The one area where I agree with the OP is that if you are using the rental as a means of financial leverage in order to acquire something you can't actually afford, it's probably a terrible idea. If there is any non-trivial risk of default you shouldn't do the transaction at all as the costs of default are quite high.

Re:Get used to it, this is the future

[Anonymous Coward]

Good for you, you are a superior human. Congratulations!

Re:Get used to it, this is the future

[FranTaylor]

If there's one damn thing right my parents taught me, it's about owning my own shit.

My family taught me that owning a house is a total and major drag.

My father was forced to relocate on his job to a different office, about a three hour drive away from home. The job market was not good at the time and he was an older man, it was not possible for him to resign and take another position. He had recently purchased a new home and there was no possibility of selling it and moving in the required time frame. His only choice was to get a studio apartment in the new town and live there on the weekdays. The house that he worked so hard to purchase turned into a total nightmare for all of us.

Re:Get used to it, this is the future

[JeffAtl]

How is LA Fitness a scam? It's pretty much a small sign-up fee and then month to month.

The gyms you're thinking of are those that where a lifetime membership is purchased for sometimes thousands of dollars. Those gyms use high pressure sales tactics and there is a stiff penalty to cancel the membership.

Re:Get used to it, this is the future

[Anonymous Coward]

It has nothing to do with "affording". A lot of us can afford it and choose not to. And a lot of Apple's customers simply can't afford it. Keeping up with the Joneses has half the Western world in hock.

Re:Get used to it, this is the future

[Anonymous Coward]

Stop liking what I don't like!

Re:Get used to it, this is the future

[Maritz]

I'm sure somebody will respond that having the latest phone is an entitlement and the government should be distributing them to everybody.

You're sure are you? I'm fairly sure that no-one will respond with that, as it's just a convenient straw man, but I guess we'll see.

Re:Get used to it, this is the future

[edtice1559]

By the time you made your post, somebody already had made that comment. Here's the link. http://slashdot.org/comments.p...

Re:Get used to it, this is the future

[xombo]

It's only a scam if you aren't using your membership. It's not like it's the gym's fault that people are lazy.

Re:Get used to it, this is the future

[Anonymous Coward]

Thousands of dollars for a LIFETIME membership and a stiff penalty to cancel your lifetime membership? Have you ever been in a gym??

Re:Get used to it, this is the future

[Anonymous Coward]

It's a pretty straightforward budgeting trick.

Instead of paying a large amount infrequently which is difficult to budget (you need to budget for a year or more and stick to the budget for that entire time), you pay a smaller amount more frequently which is easier to budget (you budget for a month and need to stick to it for a month or two).

Additionally, this particular one fills a common niche that's going away (carrier "subsidized" upgrades) and combines it with an under utilized service (apple care). It may well make financial sence for anyone who would buy a new phone every year anyway juts to "keep up" to do it this way.

Personally I'm happy to lag 2-4 hardware generations before upgrading my phone, and I've never gotten Apple care so it's probbaly not a good deal for me. But I'm not the only use case.

Re:Get used to it, this is the future

[travisco_nabisco]

Cycling does cost a bit more to get started, however I have made it work out to my advantage by cycling to work every day, saving the cost of a second car for the family. When you compare a bike to a car, you can spend a lot of money on the bike and gear each year and still come out in the black.

Re:Get used to it, this is the future

[Insightfill]

It hasn't suddenly become a thing. People have been leasing cars forever.

Until this year, Illinois had the distinction of being a state which charged FULL sales tax on the purchase price of a leased car. If you dumped the car after the term, you'd get none of the difference. If you decided to KEEP the car, you'd pay sales tax (again) on the residual. Leasing was only popular with people bad at math and not willing to gamble with reselling a car later.

I remember my first cell phone and contract in the early 90's. Salesman: "the phone is free, and then service is $40/month."

Me: "What if I decide to just buy a phone?"

Salesman: "Then the service is $30/month."

Me: "So, I'm basically financing the phone into the monthly service, but like... forever?"

(awkward pause).

Me: "I think I'll buy the phone."

It was several years later that they all decided to screw the consumer twice: by charging the same monthly charge whether you bought the phone or not.

Re:Get used to it, this is the future

[Anonymous Coward]

Your point is not relevant. Apple's actions here have nothing to do at all with the cost of the phone being separated from cell phone service, and is not a symptom or cause of that happening, either. Nice strawman, though, got some good karma out of it. Great job!

Re:Get used to it, this is the future

[Bob the Super Hamste]

From a previous job reinsurers often will insure policies of other reinsures. This has previously lead to some bad situations in the past with huge tangled webs.

Re:Get used to it, this is the future

[hattig]

Unless you like to own a phone for three years, there's little difference to this 'rental plan' and the typical "own and put into a drawer" plan. Except you get a new phone every year, in a similar manner to a car lease plan that people appear to be happy paying hundreds each month for.

The AppleCare should take care of damage, so you don't need the old phone as an emergency backup. The only thing missing is hand-me-down capability.

If you typically avoid AppleCare, or are happy with your provider, then using their subsidy-based package is still an option. You still get to decide.

Spread the cost - because otherwise you might buy that $300/$400 Huwaii/Xaomi/Nexus android phone instead as it's more affordable up front.

Re:Get used to it, this is the future

[Bob the Super Hamste]

Ever try paying off a loan really early, like in 8 days in on a 36 month term? That was one of the biggest pains in the ass I have had to deal with.

I got a loan for my most recent car as I found one quicker than I had imagined so the money wasn't in my account yet so since it was cheaper to get a loan until the money showed up than to pay the additional cost of gas each day for driving my Jeep I got a loan. Then once the money showed up in my account I ended up spending about 3 hours on the phone with the loan company who didn't even have a record of my loan in their system yet and then once they tracked down the paperwork they tried to convince me that I had a really good rate and that I should keep the loan. Eventually I was able to get everything straightened out. The mail on the subject for the next moth was kind of funny to watch roll in as things arrived all out of order.

Re:Get used to it, this is the future

[hattig]

Yeah, Apple are missing an opportunity here with their interest free loan and market rate prices!

Rent to Own shops have always been a ripoff however, but they do spread the cost, albeit at a high price. Useful for washing machines (launderettes are very expensive, and you need to wash clothes today, not in six months), etc. But people just can't resist the shiny and they buy things they don't need. But they're young and make poor decisions because they haven't the experience of life to actually understand what is important or not.

Shopping catalogues were the same in the 80s and 90s (and possibly still today). Overpriced goods on a repayment plan targeting the less wealthy.

Re:Get used to it, this is the future

[digitalPhant0m]

Owning is great for something like a hammer. It's going to be a useful tool for years to come.

The phone will be obsolete and/or useless in a year or two, at which point most people are going to buy another one.

Re:Get used to it, this is the future

[JeffAtl]

Not sure if serious. Hopefully the caps indicate that you realize that Lifetime Fitness fits exactly the model I'm referring to.

I've been a member of LA Fitness for years and they are pretty much month to month. Not sure why anyone would have a problem with that and consider the business model a "scam". The membership can even be frozen if a person knows they won't be going to the gym for a while.

Re: Get used to it, this is the future

[Anonymous Coward]

This is why we have the problems we have today. Phones are not obsolete in a year or two. The companies trick you into believing they are. And you fell for it. Hook line and sinker. You are what we call a sucker.

Re:Get used to it, this is the future

[Anonymous Coward]

You can, of course, have that opinion if you like.

Re:Get used to it, this is the future

[Anonymous Coward]

What do you mean? Are you saying that the concept of credit has been about for less than several decades?

Remember, a fraction of time can be both several decades and several centuries.

Re:Get used to it, this is the future

[PopeRatzo]

Dunno... back when I was young and poor, I paid $10/mo for a cheap dialup ISP account (with 200 whopping hours a month access time), and literally *built* my rigs from spare parts and carcasses at the local computer shops (to give you an idea, my very first VGA monitor needed a new capacitor and I still paid $75 for it). Sometimes I'd straight-up barter parts if I stumbled across something useful.

That's nothing. I used to hunt and skin neighborhood cats to make my own underwear and socks. I literally used their guts for garters.

Re:Get used to it, this is the future

[pigiron]

I don't see why not. I lease by Bimmer and took out a personal line of credit for my Rolex, put my upcoming tropical vacation on my credit cards, and so this phone payment plan fits right in.

Re:Get used to it, this is the future

[Anonymous Coward]

If I wanted the latest and greatest, I'd buy Samsung. Judging from the recent announcement, you're finally getting:

- Air View
- S Pen
- Live Wallpaper
- so much more

after like 3 years

Re:Get used to it, this is the future

[ceoyoyo]

Leasing isn't necessarily only for people who are bad at math or who want things they can't afford, even if you live in a place where they somehow manage to charge double taxes. Leasing can make sense if you're using the leased vehicle to generate income or if you can claim the leasing cost as a tax write-off. In the first case the lease is essentially a loan to make an investment. In the latter it's getting the taxpayers to pay for your new toy.

Re:Get used to it, this is the future

[Toshito]

What we really need is a weekly payment program to pay for those monthly payments.

Re:Get used to it, this is the future

[edtice1559]

That's an interesting idea. Do you have any practical examples? Nobody knows if you post to Facebook (or /.) from a shiny new iPhone or an old computer in the library.

Re:Get used to it, this is the future

[Anonymous Coward]

You just made his point. Assuming there were a few hundred good albums that came out in the 60s to the 80s, that's thousands of dollars to buy. It would take years of $120/year to cover that cost. And what about reissues, and new compilations, and previously unreleased material?

Re:Get used to it, this is the future

[JudgeFurious]

You really think it was designed to increase inequality? Seriously? That is for to laugh. It was designed to make money without regard to equality, inequality, sustainability, or anything else. It was designed to make money. This digital divide you talk about isn't intentional at all. It's worse than that because if it was intentional then it could be stopped in a fairly straightforward manner. Instead it's like an annoying little gnat that keeps flying in the face of these companies and surfacing at awkward times like a random fart floating around in the middle of a cocktail party. They address it with a program or an offer, give away some stuff every once in a while, and hope everyone quits noticing it and resumes throwing money at them. It's just a side effect and the companies making all this cool stuff really would prefer that every single person in existence could afford their stuff. They just aren't interested in doing anything to make that happen. Not their problem.

Re:Get used to it, this is the future

[Anonymous Coward]

That argument makes no sense. We are trying to compare two options, not choose neither of them.

Re:Get used to it, this is the future

[CastrTroy]

As an avid cyclist, I'm quite aware that there's almost no end to how much you can spend on cycling. The fact that there exist bikes that cost $15,000 off the shelf speaks volumes about the cycling market.

I also, cycle to work, which helps with the costs. But what also helps with the costs is realizing that you probably don't need most of the stuff they are trying to sell you. I pad $900 for my bike, and I've had it for 4 summers, and it's still in excellent condition. I'll probably ride it for another 4 years before I feel the need to upgrade. I could probably use the bike for 20 years before I would need to replace the frame. All the other parts can be replaced for a decently low cost as none of the parts on my bike are particularly high end, even though they function perfectly fine.

Re:Get used to it, this is the future

[Anonymous Coward]

Like making the decision to buy an iPhone? What could be more wrong than that?

Re:Get used to it, this is the future

[Anonymous Coward]

The post you linked to doesn't even mention *phones* in general, much less actually make the claim that "the latest phone is an entitlement" and/or "the government should be distributing them to everybody".

Re:Get used to it, this is the future

[Anonymous Coward]

Actually, Apple's actions here are *precisely* because the cell service providers have stopped wrapping the cost of the phone up in the cost of the service.
With AT&T, for example, you can pay the cost up front, or get a similar deal to what Apple is offering. AT&Ts payment plan (without AppleCare), however, costs slightly more than Apple's does *with*.

Apple's payment plan has you paying pretty much *exactly* the up front cost of the phone over the course of the payment plan (in fact, buying the phone *with* AppleCare, you actually save about $10 over paying for them in full, up front).

Re:Get used to it, this is the future

[wyHunter]

It's called renting everything. No thanks.

Re:Get used to it, this is the future

[Anonymous Coward]

Maybe I didn't word my response well but Apple could do this whether or not there was a cell contract involved. They'd figure it out.

Re:Get used to it, this is the future

[PopeRatzo]

That's an interesting idea. Do you have any practical examples?

I do.

https://scholar.google.com/sch...

The digital divide is real.

Nobody knows if you post to Facebook (or /.) from a shiny new iPhone or an old computer in the library.

How do you text someone in order to network for jobs from an old computer in the library? It's not the hardware, it's the milieu.

The digital divide is real.

Re:Get used to it, this is the future

[viperidaenz]

Or, an insurance company could skimp on reinsurance and when a natural disaster hits, you find out they called themselves AMI

Re:Get used to it, this is the future

[Gr8Apes]

I'd say the majority came out in the 60s-90s, with a few new bands in the 2000s through today. The number of decent new bands seems to have dwindled rapidly, and access to them is being choked by the virtual duopoly of ClearChannel and Infinity, at least in the US. Finding decent new music has become much more difficult, at least in my experience. There's lots of poppy crap that will not be offensive for the first couple of listens, but rapidly becomes annoying after that. Unless, of course, you're a fan of the new empty country-pop-rock, trance-electronic, or (c)rap that's flooding everything.

Re:Get used to it, this is the future

[PopeRatzo]

You really think it was designed to increase inequality? Seriously? That is for to laugh. It was designed to make money without regard to equality, inequality, sustainability, or anything else.

You're probably right. The digital divide benefits those who benefit from inequality. For them, inequality is a feature, not a bug. They use the digital divide to enhance their position.

Re:Get used to it, this is the future

[viperidaenz]

fsociety will fix that

Re:Get used to it, this is the future

[viperidaenz]

Unless you go to a rent-to-own type shop, then its $50/month for 24 months. Why pay $500 when you can pay $1,200!

Re:Get used to it, this is the future

[Quirkz]

I had the same scenario a couple of years ago but didn't have too much trouble. Bought a car. Had the cash in an online account that took a week to transfer. I got a loan from the dealer in the interim and just paid the whole thing off when my first monthly payment was due. I used the online payment system, so I didn't even have to talk to a person or anything, just transferred the money and the account was closed.

Re:Get used to it, this is the future

[Anonymous Coward]

That seems foreign to me. I've always been putting a third of my income into savings every month, no matter what my income level, and my income has ranged from very low (12,000 a year) to what some call middle class (roughly 48,000.) Sure I always feel like I'm in a money pinch, but I'm so used to this being my standard of living that it doesn't bother me.

I've gone from earning about the same as you to earning a fuck of a lot more than you. I save for retirement. Yet it still feels like I'm on a money pinch all the time. It doesn't stop when you get more money. I imagine there is an income where you don't feel monetarily constrained, but I haven't hit it yet.

I looked at my pay check over the last ten years. The pay has gone up 2.5X. But my take home pay hasn't changed. Increasing taxes, maxing 401ks, employee stock programs, etc.etc.all add up to take up the slack. If I stopped saving for retirement as fast as I can, I imagine that I would feel wealthier, but I don't think it would be the smartest plan.

   

Re:Get used to it, this is the future

[sl149q]

For serious avid cyclists the correct number of bikes to own is N + 1, where N is the number of bikes you currently own.

You will also want a bundle of electronic goodies for them (power meter, gps cycling computer, rear facing and front facing video, electronic shifting...)

And monthly premium accounts from Strava and TrainingPeaks (which gets this post back to topic of monthly fees.)

I will look forward to one or more of the large bike manufacturers (are you listening Trek? Cervelo? Specialized?) to rent bikes to me yearly along with a similar XXXXCare plan.

Re:Get used to it, this is the future

[sl149q]

You can tell how obsolete phones are after two years by checking what companies like Gazelle will pay you for one. My three year old iPhone 5 will still get me $105. I assume they think they can sell it for more than that.

Re:Get used to it, this is the future

[sudden.zero]

Exactly!

Re:Get used to it, this is the future

[Grishnakh]

The 60s-80s reference should make it pretty obvious I'm a fan of classic rock, and also metal (but not really extreme metal; think Iron Maiden, not whatever the latest Norwegian growling death band is), so obviously I'm not interested in anything playing on the radio these days (aside from the classic-rock stations where I can hear the same 5 Pink Floyd songs over and over and over), so we're talking about indie stuff here. I'm sure there's decent stuff out there somewhere, but good luck finding it. Record labels are no longer going out and finding actual talent and making and marketing albums any more like they used to; this sounds all evil-corporate, but it actually served a good purpose in being a quality filter. After all, look at how talented and influential Led Zeppelin was, which was a product of that system. There's lots of great bands that came about because of that system (and of course there's plenty of crappy ones like Poison...). I also think that it's quite likely the finished product from these discovered bands ended up being different because of input from the record producers. Sometimes this was a disaster or negative in some way, but other times it was probably quite positive, helping new bands get access to experienced professionals to help guide them (as well as sound engineers to help them with that aspect, before the advent of the Loudness Wars).

Nowadays, garage bands can record their own albums, but they don't have experienced people around to help them or give them feedback. They can post their music on YouTube, sell it on cdbaby.com, etc., but you really have to be active in a particular subculture to find out about them, and then you're going to spend tons of time sifting through a lot of stuff that's probably quite mediocre at best hoping to find a gem. And that's if you can even find any bands that play stuff in the genre you're looking for. It's like everyone has diverged far from the mainstream. I like a lot of classic metal for instance (Iron Maiden, Crimson Glory, Queensryche (first 5 albums), Scorpions, Testament, Dream Theater), but if I hang out in Reddit's /r/metal, while there's lots of activity and lots of new music, it seems that it's almost all from Europe, and frequently some kind of death metal which just isn't of interest to me.

Also, even if you do find some great bands on Youtube or wherever, that's nice, but what about concerts? If you're a fan of some Swedish band, you're probably not going to get to see them live when you live in the US. If you're a fan of some garage band, you're almost definitely not going to see them live because they don't tour. There's still bands playing to arenas, but they're all old classic-rock bands like Styx that are making the money they can (all their fans are middle-aged and have good incomes and can afford $50-100 for a ticket, and they bring their teenaged kids with them too) before they're too old to tour any more. Black Sabbath is already saying this is their last tour because Tony Iommi can't do it any more. These guys are getting old and touring is hard, and there's no new bands able to build up the fan base needed to support that. Things are a bit different over in Europe where they have regular metal festivals in Sweden, with lots of local bands you probably won't easily hear over here.

For anything played through corporate channels or sold on CD at Walmart, it's just like what Gr8Apes talks about below.

Re:Get used to it, this is the future

[Grishnakh]

What you're talking about makes sense if you pre-plan to replace your phone (or other equipment) after a set amount of time, no matter what. Leasing works for situations like that, where you have a company and replace your car/printer/whatever on a set schedule to avoid excessive repair costs. What if you don't, though? What if you get to the end of this term and it turns out you'd rather just keep the thing because it works fine? With renting, you'll keep paying for it, but if you had bought it you could just keep it and not have that extra monthly bill. The concern over resale value is like insurance: if things change unexpectedly and you need to unload it for cash, you can do that.

Honestly, I think the rental/leasing model works well for two situations: 1) you're the kind of person who just insists on having new stuff all the time, and is willing to pay for that. You want a new phone every year or two, a new car every 2-4 years, etc. Some of us don't do that. 2) you're a business: economics are totally different for businesses because of deductions and depreciation. Individuals can't deduct or depreciate their car or phone or computer (unless they're running a business of course).

Re:Get used to it, this is the future

[Grishnakh]

Are you married? That'll but a big drain on your finances....

Re:Get used to it, this is the future

[Grishnakh]

And, frankly, I need to leave the house and talk to other people, because even though I'm a grown adult, I have socialization problems.

Me too, but I've never done any socializing at a gym.

Of course, one gym I was at seemed like it was full of ex-cons.... That changed when I moved to YMCA.

You can go to a bar to be with other people, sure,

That never worked with me. I'm not much of a drinker though, which is a big part of the problem; Americans think you're "not fun" if you don't get sloppy drunk all the time.

Re:Get used to it, this is the future

[Grishnakh]

The problem here is that the car competes directly with several other cars in its class: the automotive market is full of stiff competition. And not everyone gets a loan; they don't give you a discount when you pay with cash, the price negotiations are separate from that.

Re:Get used to it, this is the future

[Zaiff Urgulbunger]

I'm wondering if Apple is also trying to control the second-hand market too?

Car analogy: As I understand it, car hire companies get new cars leased to them by the manufacturers at a nice rate so that (a). they don't need to worry about actually maintaining the cars... they only have them a short time, and (b). the manufacturer doesn't need to worry about N-thousand, almost new cars flooding the market in a year or so's time. Point-B would adversely affect the price of brand-new cars of the same model.

And considering how many units Apple ships, the second-hand market for iPhones is likely HUGE. It means they ship less new units than they might otherwise.

That said, they should probably lower the cost even though on the face of it, they would be making less profit, because of the above benefit (reduction of) the second-hand market. IMHO. Maybe they will if this experiment works?

Re:Get used to it, this is the future

[mjwx]

Monthly payments for everything you use and pretend to own! From your music you listen to, to the movies you watch, to the software you use, to the storage space on the cloud where you keep all your data, and the physical hardware you pretend like you own. Pay for everything in your life, for the rest of your life! What a deal! Fall on hard times for a few months and miss a few payments, and watch your whole life disappear! Weeee!

The thing is, like most people, 90% of the crap I watch I'll never watch again. I'm not going to be watching the same WWII doco regularly if again at all.

My entertainment budget isn't big enough to buy everything I watch once permanently, so I pay for a streaming service which gives me the content I want for a fraction of the price and if there is something I'd like to keep permanently, I'll wait for the DVD to come on special.

Re:Get used to it, this is the future

[mjwx]

Gyms are a scam. The point is that they count on the people that buys the service on the impulse and rarely if ever set their feet there, hence the automatic monthly payments and the obligatory period.

I couldn't agree more.

I've got a 2nd hand weights set, rack, bench and exercise bike for just over 1 years worth of gym fees (A$1200). I bought most of it 2nd hand and set it up under the back porch.

Then again, if everyone does this the price of 2nd hand gym equipment would skyrocket.

Re: Get used to it, this is the future

[Anonymous Coward]

Not having an ios is not digital divide. Digital divide is smaller than ever before in history. Go to a 3rd world country and check it out.

Re:Get used to it, this is the future

[Anonymous Coward]

Check out Frontiers Records. I had given up on finding "new" music that I like as much as the older stuff but this label pretty much exclusively caters to the AOR/Melodic Rock crowd. They've signed up a ton of older artists as well, who put out new releases regularly. I love having new albums from "classic" bands. Nobody seems to know or care that they exist, but it works for me.

Re:Get used to it, this is the future

[thsths]

Exactly. Sure, I did invest into my current bicycle, but it is also getting 20 years old now! A yearly service costs peanuts, and every once in a while you need a new gear, tyre or brake pad. Compared to the cost of a car, the bicycle is 2 orders of magnitude cheaper.

Re:Get used to it, this is the future

[bingoUV]

but it's simply not significantly better if the rental price is reasonable

Why would rental price be "reasonable"? There is a manufacturer, and there is a financier. Financier's whole profit depends on the rental price not being "reasonable".

Financier might also be the retailer - in which its profits might come from sales margin rather than financing. But now margins need to be higher than if it were only a retailer because financing has costs.

Re:Get used to it, this is the future

[david_thornley]

People's early experiences lead to lack of impulse control. Impulse control is good when you have some stability, but can be counterproductive when you don't.

Re:Get used to it, this is the future

[david_thornley]

I looked at used cars, and the price does seem to go down fairly slowly if you intend to use the car that long. Cars that cost half the new price at five years old seemed to be common. Since I generally intend to keep a car for about ten years, it didn't seem to be a bargain to me.

Re:Get used to it, this is the future

[edtice1559]

At the end of the rental period, if you want to keep something, you just purchase it at the used price. But I'm still not making my point clearly, I don't think. Buying something that will eventually be worth nothing is really the same as renting something from a financial standpoint. There's nothing wrong with buying this stuff. But it's still not the same as owning a real asset. A real asset either has the potential for capital appreciation or will generate revenue. Even if you "own" it, from a financial standpoint you've rented it until such time as it has no value. By "no value" it means no value to you and no resale value. At which point you throw it out. Maybe that time period is much longer than a traditional rental contract (You probably get 15 - 20 years out of a car these days, four years out of a smartphone). But in the end, it's the same result. Compare this to say using the same money to buying say a certificate of deposit for the same period of time as the expected life of the asset. My point isn't that paying financing fees to the rental company is good, it's that if you wouldn't feel good about renting something, you shouldn't feel good about buying the same thing. The financing cost is a much smaller issue than the fact that the asset is only desirable for short-term enjoyment rather than long-term value. Obtaining something that has no potential for depreciation is a cost. How you structure the transaction is a secondary issue. Obtaining something that has potential for appreciation is an investment. How you structure the transaction is a secondary issue. (Although it will have a big impact on return). In the case of real estate, the fact that you *own* it is a big deal. Because it's going to have value for the rest of your life and a good chance of appreciating in value. Something that is going to go to zero value, buying it is the same from a financial standpoint as spending the same amount of money eating out.

Re:Get used to it, this is the future

[Anonymous Coward]

WOW - It only took four posts this time to start to the change of topic!

Re:Get used to it, this is the future

[LaurenCates]

Meh, I don't advocate that the solution for me is the solution for anyone else.

The argument is whether or not going to a gym is a waste of money. For me, not so much.

Re:Get used to it, this is the future

[Anonymous Coward]

Why? Two people living together generally spend less than two individuals.

Re:Get used to it, this is the future

[Anonymous Coward]

A few years back there was a brand and model of car I was looking for and I saw one in a dealership in a poorer area on the outskirts of the town. So I went in, examined it, started talking with a salesman - and he kept asking how much a month I was willing to pay. No discussion of interest rates, just how much a month I could spend.

Re:Get used to it, this is the future

[NatasRevol]

No, I'm saying it's been around for MORE than several decades. Which is what the GP exactly said. Not some other parsing you're trying to pull out.

Re:Get used to it, this is the future

[Bob the Super Hamste]

That too. Insurance companies are among the most scummy in existence.

Re:Get used to it, this is the future

[viperidaenz]

It wasn't really an insurance company, it was a mutal/co-op owned by its customers. They thought it would be a good idea to save on premiums by cutting on reinsurance.

The funny thing was their slogan was "Am I Insured?". Apparently the answer to that was No.

Re:Get used to it, this is the future

[Grishnakh]

I'm not saying it is. A gym can be a great value for keeping in shape: you get access to equipment that would cost you an absolute fortune to own yourself, a pool, etc. And, as you said, the somewhat-social aspect might help motivate you.

I'm just saying that I've never actually met anyone at a gym and developed any kind of relationship, and in fact I've never really seen people do much talking there at all, unless it's to some friend they came in with. They just don't seem to be very social places; people come in, do their exercise routines, keep to themselves mostly, and leave. That's been my observation at least, at many different gyms in different parts of the country.

Re:Get used to it, this is the future

[Grishnakh]

That works great if you marry a woman who's also frugal. However, with America's princess culture, good luck finding one. Generally, when a woman marries a man who has some money, she wants to spend it.

Re:Get used to it, this is the future

[Anonymous Coward]

That seems foreign to me. I've always been putting a third of my income into savings every month, no matter what my income level, and my income has ranged from very low (12,000 a year) to what some call middle class (roughly 48,000.) Sure I always feel like I'm in a money pinch, but I'm so used to this being my standard of living that it doesn't bother me.

You are claiming you've supported yourself on anywhere from $8,000/year to $32,000/year. Now, depending on where you live $32,000/year is actually quite a bit of money and you can live comfortably with many luxury purchases.

I would be interested to hear about your experiences living on $8,000/year, because I think you would have a lot of good ideas to teach people from that experience.

Re: Get used to it, this is the future

[Anonymous Coward]

"Can't participate in our shared culture" by buying an expensive smartphone and service to go along with it ? Does financial literacy/ planning mean anything to you ? Economic choice ? Budget and consequences ? What exactly happened in 2008 ? Do you still have a short term memory ?

Paging Captain Obvious

[Reibisch]

You are needed in here, stat!

Re:Paging Captain Obvious

[Anonymous Coward]

the iPhone Upgrade Program which lets you upgrade to a new iPhone every year as long as you keep paying each month. On the face of it, it might seem like a good deal

Yeah, what OP said.

Apple pretty much had to

[hsmith]

Carriers are moving away from subsidized phones due to changes they are making to make more money off of you. Due to this, it puts sales of shiny new phones at risk.

With Apple's leasing you the phone plan, it completely makes this irrelevant. Not many people want to shell out $700 for a new phone, but $30 a month they don't have to realize they are paying $200 in interest. It is silly human psychology.

They had to do it to keep things going.

Re:Apple pretty much had to

[Maury Markowitz]

> they don't have to realize they are paying $200 in interest

Opportunity cost on that is what, $150? Seems like a perfectly reasonable decision to me, at least financially.

My problem is the vendor lock-in, which is amusing considering its an unlocked phone. That part I need to read more carefully.

Re:Apple pretty much had to

[jandrese]

The cost is pretty much exactly new phone and Applecare + for the year. Apple is offering what is effectively a 0% interest loan. It's a bad deal if you don't want to upgrade every year, but for people who absolutely must have the new shiny and spring for the insurance it is break even.

Re: Apple pretty much had to

[Anonymous Coward]

Are you dumb? Opportunity cost is zero on that. And what the heck is wrong with shelling out 700 bucks for a new phone every 3-4 years? If you can't, the phone is way above your level, monthly payments or not. FFS Americans - Learn to live within the boundaries of your own means!

Re:Apple pretty much had to

[DigiShaman]

Except there is ZERO equity being put into the phone. Meaning, it's a trade-up, you can't sell the phone. Effectively, you're leasing the phone like a car as I understand it.

Re: Apple pretty much had to

[Anonymous Coward]

Only if you trade it in each year. Keep it for two years and you own the phone.

Zero opportunity cost...

Re:Apple pretty much had to

[chris200x9]

Except you are pretty much paying the full price of the phone, with a car you usually pay around 250 * 24 = 6000 of a 20000 or more car. I can't see leasing if you have to pay the full price only to have the privilege of turing it in in a year or two. Apple is probably going to make cash hand over fist with this because people will be basically buying the phone only to give it back to apple for free so they can refurbish and resell it.

Re:Apple pretty much had to

[jandrese]

That's what they were doing already. People who upgrade every time sell their old phones back to apple for about half what they paid for it and Apple then refurbs and resells them.

Re:Apple pretty much had to

[chris200x9]

Sorry, I was mistaken you don't have to turn it in, which begs the question why is this such a big deal? This whole thing is almost like a credit card only INTEREST FREE!

Re:Apple pretty much had to

[Anonymous Coward]

That's not the case. Their price is comparable to a two-year interest-free loan on the phone, but you get to upgrade every year. So they buy back your year-old phone at half its retail price, which is actually a pretty good offer.

Re:Apple pretty much had to

[Maury Markowitz]

It's a totally reasonable deal - it's at least as good as the ones you get from the phone companies, and much *much* better than what you get from your credit card company.

Re:Apple pretty much had to

[Anonymous Coward]

It is actually a 4% loan but almost no one on earth seems to be able to handle basic math.

Re:Apple pretty much had to

[Anonymous Coward]

The Apple payment plan is a purchase plan with a trade-in/upgrade option. Make the payments for two years and you keep the phone forever.

The base cost for an iPhone 6S 16GB is $32.41/month, which includes AppleCare+. Times 24 months that's $777.84 over the life of the contract. Meanwhile, you can buy the same phone outright, retail, unlocked, for $649, and $99 for the AppleCare+, for a total of $748. Apple's adding $29.84 of what I'll go ahead and call "interest". This is a two year loan at 4%. With today's rates, that's terrible, especially when the carriers are all doing plans where they effectively loan the purchase price at 0%.

Re: Who cares

[Anonymous Coward]

So, all of Slashdot, then!

Dumbest article ever

[Maury Markowitz]

Let's see, Apple does *exactly* what everyone else is already doing, for a slightly lower cost, with clearly defined terms and nothing hidden in the price, and slightly improved conditions (AC+).

Apple is evil. ::rolleyes::

Re: Dumbest article ever

[unami]

the thing is, as apple is the most profitable company in the world and sells a metric shit-ton of devices. everything evil they do is automatically more evil than when everybody else does it. comes with economy of scale. we used to look at microsoft for that, but it's google and apple right now - ms has become the underdog (besides of them selling billions of windows-copies - OSs are not very hot right now)

Re:Dumbest article ever

[Anonymous Coward]

But that is not the truth through. Apples upgrade program actually costs more then say Att's Next 12 plan.
Att Next 12 = 27.45 a month.
Apples = 32.41
So about $70 more over the course of a year.

Yes, the Apple program does come with AC+, however if you read the fine print, you are allowed 2 accidental damage incidents a year but with an additional fee of $100 per incident.

Re: Dumbest article ever

[Anonymous Coward]

So basically, it's Apple directly selling that shitty care plan we all refuse at Best Buy cashier. Except they've built it in as part of the package, so shills here can handwave it away in their sales pitch.

Re: Dumbest article ever

[edtice1559]

There are two components to AppleCare. The loss/damage insurance and the technical support. The shitty Best Buy program to which you refer is usually only the former portion. The latter has no value to /. users. However, I often recommend it to family members. Keeps me from having to help them figure out how to get their photos on to Facebook every time they go to a boring anniversary party.

Re:Dumbest article ever

[thegarbz]

With a difference.

Carrier based plans will lease out the phone until the payments are complete. Apple on the other hand is a subscription service.

What's this mean in practice? Well you only come out ahead, and it's only cheaper if you were one of those psycho iAddicts who absolutely had to have a new phone every year. Most people don't break out of a contract to upgrade to the latest phone but instead hold it for the 24 months.

Personally I don't see the conditions and price all that favorable for most people.

Re:Dumbest article ever

[Anonymous Coward]

Wasn't the announcement LEAD with "for people who want to upgrade to the newest iPhone every year"??

Re:Dumbest article ever

[Maury Markowitz]

> So about $70 more over the course of a year.

Which is significantly less than the AC+.

> however if you read the fine print, you are allowed 2 accidental damage incidents a year

So, two more than the ATT next plan then?

> but with an additional fee of $100 per incident

$70 + $100 $700 for a new phone.

If you think ATT is offering you a better deal, by all means, go for it. Don't cry if you drop your phone though.

Re: Dumbest article ever

[ceoyoyo]

The same number of iPhones get sold whether Apple sells them or a bunch of carriers sell them. The carriers make you pay a monthly fee for "service" and you get a steep discount on a new phone every couple of years. The GP is pointing out that Apple has just introduced a similar leasing program, except they're being very upfront about it, not obscuring the actual transaction in packages and other tricks. That's a good thing. So by your logic, because Apple is doing it, it's a really good thing.

Re: Dumbest article ever

[Anonymous Coward]

I suppose being convicted of doing illegal shit like price fixing makes them "Angels". At least with Microsoft, they've only been convicted of being a monopoly -- bundling an internet browser and media player which can be easily changed... Oh wait, all phones and devices do that. I wonder why they were convicted?

Re:Dumbest article ever

[Darinbob]

Lower cost? Have you actually compared.

Depends on lots of factors

[xtal]

I sell my phone every 18 months. Technology is moving fast.

It's closer to break even (with AppleCare) than you might suspect; the variance will be on the policies around damage, wear, replacement, etc.

Also consider the out of pocket on taxes - my 128GB phone cost me around $1000 out the door here in Canada. (15%)

I think it's ~$20/mo depreciation over a 2 year period vs. $34/mo they're taking, but my time is worth something, and if they make it headache free - it's not as crazy as it might seem at first when you run the numbers. I'm already paying $120/mo all in for service - yay Canada.

Over 4 years? The depreciation is very high - it's stupid to keep the phone this long if you want a new one.

If things get so grim $14/mo is a problem, no, this service isn't for you - but it's not as crazy as you might first think. I'll probably take them up if the price differential isn't too crazy here over the US.

Re:Depends on lots of factors

[Anonymous Coward]

I sell my phone every 18 months. Technology is moving fast.

This sounds pretty cliched. Would you care to share what you do on your phone which you couldn't do on the 18 month old phone just as well? I don't do any type of high-performance gaming on my phone, so I can't speak about that, but I assume performance improvements have been pretty good, so that would be one thing. But the vast majority of games, and just about all apps, are not really performance dependent. So really you are mostly just talking about being able to use new versions of the OS that may not be released for your phone, which is really just a "bells and whistles and oooh pretty" thing, since most apps released support older versions of the OS just fine.

So please share what (if anything) I'm missing out on. I'm not trying to mock you or anything...I'm genuinely curious.

Re: Depends on lots of factors

[Anonymous Coward]

Are you stupid, I have a perfectly good Siemens M55 that now costs me zero to maintain. Some days I use that instead of my iPhone. It turns the heads of all the young chicks at the bar, a perfect conversation starter with its four red flashing LEDs. If you keep a phone for 4 years it is still a perfectly working phone! It is the internet terminal/communicator part that gets old.

Re:Depends on lots of factors

[ruir]

I do the same, and it is none of your f business.

Re:Depends on lots of factors

[LifesABeach]

You're ignoring cash flow, why?

Re:Depends on lots of factors

[xtal]

One word: Camera.

Re: Depends on lots of factors

[xtal]

Life's short. I like gadgets.

Otoh, I keep cars for 15 years. I can buy a lot of iphones with the cash that saves.. to each their own.

Re:Depends on lots of factors

[fluffernutter]

I feel pretty lucky then. I've had my Samsung Galaxy s3 for a few years now and technologically it works just fine.

Re:Depends on lots of factors

[Anonymous Coward]

If you don't want so share, then just STFU and don't reply in the first place

Re:Depends on lots of factors

[wardrich86]

Android phones definitely outlast iPhones. My S2 lasted me a good 3 years. When I finally ditched it, it was still very capable, and running Kitkat thanks to the Slimkat ROM.

Apple is way too locked-down and restricted. They last as long as Apple lets them last.

Re:Depends on lots of factors

[Mathieu Lu]

I pay 10$/month for a data-only plan in Canada that is "pay as you go" up to 35$/month for 5GB (Rogers/Fido/Telus have "iPad plans", but you can use them on any device).

Re:Depends on lots of factors

[Anonymous Coward]

Android phones 'outlast' iPhones largly by virtue of never being able to be upgraded past the version of Android they shipped with. (Hopefully, you'll at least get security fixes, but that isn't guaranteed by a long shot.)

Re:Depends on lots of factors

[Anonymous Coward]

Still running an iPhone 4S, 4 years old now. So 4 > 3 right?

Re: Depends on lots of factors

[Karlt1]

Really? When OS 9 is released in two weeks it will support every iPhone released since September 2011. How many Android phones released since 2011 are still getting updates?

Re: Depends on lots of factors

[Uberbah]

It's the Hatorade Distortion Effect.

Re:Depends on lots of factors

[david_thornley]

My iPhone 4 lasted a good 3 years, still going strong. It went to my sister-in-law, who's still using it, once those three years were up. Granted, she doesn't make all that much use of it, but she likes it. (No battery replacement either.)

Re: Depends on lots of factors

[wardrich86]

Quite a few, actually. Not all official updates, but generally better updates than what the Carriers/manufacturers offer.

How many iPhones allow custom ROMs to be installed - which allow things like adblocking and OS customization?

Re: Depends on lots of factors

[Karlt1]

Name an Android phone from 2011 that is still getting updates?

As far as adblocking, no need for a "custom rom". Just click on "update" when IOS 9 comes out and you can download any number of third party ad blockers that work with Safari and web views in 3rd party apps.

Re: Depends on lots of factors

[wardrich86]

Cyanogenmod is still releasing ROMs for the Galaxy SII (Released May 2011) http://get.cm/?device=skyrocke...

There are surely other phones from that era getting updates, too. You'll also find Slimkat and other ROMs for it that are still supported and updated frequently.

Is there full-system adblocking in Cydia? It's an honest question because I haven't touched iOS since I moved to Android.

Re: Depends on lots of factors

[Karlt1]

Really? You are comparing the ability of all iPhone users worldwide who have bought a phone introduced since 2011, being able to click on Settings -> General -> Update and updating to the official release of iOS 9 the day it is released to rooting your phone and getting a third party, unofficial update if your phone is supported?

What happens when the next security vulnerability comes out? Will you get a patch for that the day Google releases it?

The ability to block ads in Safari using a third party ad blocker will be built into iOS 9.

https://developer.apple.com/library/prerelease/ios/releasenotes/General/WhatsNewInSafari/Articles/Safari_9.html

For the Hardcore Apple Fanboys.

[blueshift_1]

It's what carries do anyway with subsidized phone. You get the phone for cheaper, but pay the carrier in the long run for well over the cost of the subsidy. But lets just take a look at who this is targeting - people who want the latest iPhone every year. For ~$35 for 12 months is $420. So you save a couple hundred dollars if you were to buy it every year if you just have to have the latest and greatest. This isn't for the people on the 2 year cycle who would end up paying more in the long run.

What it comes down to is that the hardcore users always pay more - but now this is a way to pay just a bit less. And maybe convince people on the fence to do the same.

Re:For the Hardcore Apple Fanboys.

[pixelite]

ill wait to see what they charge to sell the lease returns to the used market for. Apple will probably just lease them to a new drone at full price...

Article tells us headline is wrong.

[Thruen]

FTA:

For someone who knows that -- without a doubt -- they will upgrade to whatever new iPhone comes out in a year's time, and they're confident that they'd definitely take out Apple Care, it amounts to a saving of a few dollars over two years.

This is just another pointless article by a hater, he doesn't even agree with himself. It's bait, and not even good bait, he throws a few numbers out there but doesn't show us any actual cost comparison between using the upgrade program Apple offers and, say, paying full retail or taking advantage of other upgrade programs offered by the service providers. Indeed, he even states that you can save money using the program while complaining that you're just sending more to Apple. There's no substance to the article, no facts to back up all of his complaining about the bad upgrade deal. He's probably just sour he's already in a contract and can't dump his outdated phone to take advantage of the new program. This article is just one of the many new additions to the pointless Apple hate on the internet we'll be seeing now that they've announced another upgrade to their mobile product line.

Just a quick disclaimer, since a bunch of you will no doubt label me a fanboy, I use Apple AND Android products, they both have different advantages and disadvantages. I find myself defending Apple products most often though because for some reason there's this strange hate towards them from people who don't use them, as if we should all be that worried about what phone other people are using...

Re:Article tells us headline is wrong.

[Anonymous Coward]

I don't hate apple phones. I hate apple users. The phone is an amazing piece of hardware, the users are by and large snotty, stuck up, and think their bum smells of roses. They could also never admit that there are nice android or windows phones as well.

I have nothing at all against Apple, I am not fond of the ecosystem, but they do make good hardware, and they seem to care more about your privacy then most. If I could have apple hardware without the ecosystem I might even consider it. Well no I wouldn't because I want nothing to do with the users.

This article is ridiculous

[WD]

Phones are different than computers, yet people still try to apply the computer mentality to it. You don't just buy a smartphone and sit back and use it until it breaks. Unlike Windows XP, your smartphone OS has a very limited window in which it will receive security and other software updates. For iPhones, it seems to be a few years. For Android, it is worse and generally always less than two years. For some of the discount Android phones on discount carriers, the phone may have been abandoned before you even made the purchase!

In what world do you buy a smartphone and use it for the rest of your life? An upgrade plan that includes Apple Care "bad for most"? Hint to the author: You can't extrapolate your personal opinion to apply to the rest of the world.

Re:This article is ridiculous

[EzInKy]

A smartphone is a computer that makes phone calls. My Nokia N900 that I bought in 2009 is still going strong. Still, you can't fault a company for trying to make a profit. That is, after all, their very reason to exist.

Re: This article is ridiculous

[Anonymous Coward]

Your N900 is literally a computer though. It was essentially positioned as a Linux driven micro-PC with a cellular radio. That's not quite the same position current phone manufacturers are taking so literally. In any case, most phones don't last as long as PCs. They're simply not designed to and the goalposts move much more quickly save for the most casual of users and use cases.

Re:This article is ridiculous

[Alumoi]

I buy a phone in order to be able to reach people when I need, be it by voice, sms, mail, whatever. I might use it for web browsing when I really need some info in a hurry and I don't have my tablet/laptop with me. For anything else a phone is just inconvenient.

Re: This article is ridiculous

[EzInKy]

Interesting! Do you have data on how many smart phones fail versus how many are still functional but discarded.

Re:This article is ridiculous

[ProfBooty]

I use mine until its broken or needs a new battery.

I'm also super frugal and live a lifestyle that most people would prefer not to in order to gain capital for business ventures.

I don't "need" flashy and shiny new things all the time nor do I use apps on my smartphones other than included ones.

Re:This article is ridiculous

[Anonymous Coward]

Are you suggesting the software update I just got on my 2011 antique android for Chrome and Firefox isn't really
an update at all? It just pretended to update my Browsers!!! That in reality, I lost support for my device in 2013
and I should've already bought a new Android to use the latest browsers!!!??

Re:This article is ridiculous

[Actually, I do RTFA]

. For iPhones, it seems to be a few years. For Android, it is worse and generally always less than two years

You're ignoring the trends. A couple of Apple devices I have from 2011 are still going strong and are supposed to be supported through the next major OS update. Android devices go out of support lifetimes like every year.

It's almost like Apple thinks they can make people want to update, and Google thinks they need to force someone to with an insecure device.

In what world do you buy a smartphone and use it for the rest of your life?

The rest of my life? No. But until it breaks, why would I change it.

Re:This article is ridiculous

[Anonymous Coward]

Unlike Windows XP, your smartphone OS has a very limited window in which it will receive security and other software updates.

I'm an Android user. WTF is an update?

Re:This article is ridiculous

[FranTaylor]

2008 macbooks are still supported in the latest OSX

Re:This article is ridiculous

[Actually, I do RTFA]

Sorry, true. I was only thinking of iDevices when I said 2011.

Re:This article is ridiculous

[antdude]

I still use unsupported Windows XP Pro SP3, Debian oldstable (still gets updates), an used iPhone 4S with its iOS v8.4.1 (and soon v9), VGA+DVI, analog audio speakers, PS/2 clicky keyboard, etc. They all still work for me. I'll upgrade when I am forced (breakages, can't use anymore, etc. like my analog hearing aid [don't like digital!]).

This shows exactly why most Americans...

[Anonymous Coward]

will never save enough money for retirement.

Re:This shows exactly why most Americans...

[ProfBooty]

Yep.

You NEED paid TV in some form.

You NEED a new smartphone.

You NEED a smartphone plan.

You NEED to go to a private 4 year college.

You NEED a new car.

You NEED to eat out.

Or substitute NEED with DESERVE.

Err.. those are want's not needs.

If you can live frugally you can save for the future, be happy, and enjoy a secure lifestyle.

Re:This shows exactly why most Americans...

[FranTaylor]

You NEED a new car.

According to the New York Times, in the 1960s and 1970s, the typical car reached its end of life around 100,000 miles, but due to manufacturing improvements such as tighter tolerances and better anti-corrosion coatings, in the 2000s the typical car lasts closer to 200,000 miles.

If corporate america really thinks you NEED a new car, then why have they halved the sales by doubling the lifespan?

Re:This shows exactly why most Americans...

[Anonymous Coward]

Competition from Asian competitors, maybe? Fleet customers who want reliable cars? Competition with - gasp - each other?

Re:This shows exactly why most Americans...

[Anonymous Coward]

How much do we drive now, compared to the 1960s and 70s? Increased mileage per year could account for some of that.

6S

[iTrawl]

Nothing spells "success" like 6S. Others might say that spells "sucks ass", but to each their own.

So we're just posting opinions now?

[Anonymous Coward]

When I opened this story I was hoping to see, at the very least, some sort of basic calculation supporting the claim. However, apparently even something as simple as posting the current prices and some rudimentary napkin math are too much to ask of the OP.

If this catches on

[Marginal Coward]

If this catches on, I bet the car companies will be doing it soon. Imagine a scheme in which you pay a monthly fee for the use of a car, though you never actually own the car. If they put their minds to it, I bet the car folks could even get people to pay some sort of large, up-front fee for the car they'll never own. (Sweet!) And as an inducement, the deal might include all maintenance, for free. Not only would you save a lot of money that way, you'd never have to worry about replacing the battery. Best part: you never have to buy a car again!

Re:If this catches on

[Anonymous Coward]

It's called leasing

Re:If this catches on

[Anonymous Coward]

No, it's called irony.

Re:If this catches on

[Anonymous Coward]

It's called whoosh.

Re:If this catches on

[pubwvj]

This raises an interesting problem.

I hack my trucks to suit my needs.

Same for my tractors, I've customized them too.

Oops, and my computers too.

I wonder how these companies are going to like that. I'm certainly not going to stop modding. These things are tools. I buy them to do jobs. I mod them to do the jobs the way I need them to do it.

But then, I keep my computers for ten years, my trucks for 15 even 20 years and tractors last 40 years. My house is designed to last 400 years, maybe longer. I'm not interested in a new model every year that I'm going to have to rehack. I need tools to do my work and rehacking is a waste of my time. I've got other things to hack.

Well, it's Apple

[Anonymous Coward]

All of Apple's current offerings are a bad deal for most.

Lame doom and gloom article

[Anonymous Coward]

"In reality, Apple would like you to perma-rent your iPhone and keep paying through the nose for it. Ideally forever. "

Except for the fact that apple has to keep giving you a new phone every once in a while so you're not perma-renting anything. You're on a subscription plan for new to ensure brand loyalty.

Re:Lame doom and gloom article

[ruir]

It is got nothing to do with renting, or brand loyalty, iphone users are one of the most loyal. It is about killing the 2nd hand market.

Re:Lame doom and gloom article

[FranTaylor]

It is got nothing to do with renting, or brand loyalty, iphone users are one of the most loyal. It is about killing the 2nd hand market.

the second hand market has already decided to not pay full price, they're just going to get android phones instead.

Re:Lame doom and gloom article

[ruir]

Who cares about android??

Green alternative

[Barbecue911]

You may have heard that Apple had a little get together today.

This is news to me! Seriously, anyone who wants to criticize Apple should at least go to the product site for details. I'm not an Apple fan, since I don't like the low fixability quotient of Apple's mobile products. But if you're buying into the iCosystem this might not be a bad idea. You trade in your old iPhone, instead of just letting it gather dust in your closet or worse dirt in a landfill. Let's just hope that Apple really recycles the old phones and not just reexport them to the Third World.

Re:Green alternative

[Frankie70]

Let's just hope that Apple really recycles the old phones and not just reexport them to the Third World.

Why?

Re:Green alternative

[Anonymous Coward]

poor people are undeserving of nice things maybe?

Apple's deal is great ... for Apple, of course!

[enjar]

People are surprised that the most valuable company in the world got there by not being a charity? They are JUST now figuring this out?

Despite all the marketing, at its core, Apple is a profit-maximizing, shareholder-serving corporation that makes money by selling hardware and services. They are quite good at it, as well, with cash on hand that's larger than the GDP of some countries. They got here by figuring out ways to have people give them money.

And here's another little secret: any company with a significant advertising budget is doing THE SAME THING. When's the last time you saw flashy marketing for a bag of carrots or a gallon of milk? You only see that kind of thing for stuff you largely need to be convinced to buy because you don't strictly need it.

Is it really that bad?

[thedbp]

OK, so $27.45 * 24 months is $658.80, that's $109.80 more expensive than the unlocked iPhone by itself. AppleCare+ is included, that's $99, so that brings the leasing premium down to $10.80 over the course of two years in Apple's pocket for financing the hardware. And then, halfway through the 24-month financing period, you get an upgrade to the latest device. Sounds legit to me, and a much better deal than carriers are offering.

If you purchased outright each year, you'd spend $648 the first year, $648 the second year, but get back approx. $300 for selling your previous-gen iPhone, bringing the total hardware cost over 2 years to $996.

This program also puts a whole lot more power into the hands of the consumer, as they are unlocked and can be used on any network. If more and more people are using unlocked phones, we might actually see some real competition in the wireless industry when it comes to things like customer service.

Re:Is it really that bad?

[Anonymous Coward]

It's a bad deal because, unlike shelling out for the phone, you don't own anything. You can't sell the phone. You're handing a couple hundred bucks to Apple.

Re:Is it really that bad?

[Anonymous Coward]

Actually, since AppleCare+ for the 6s series is $129 (not $99), it brings the 'leasing premium' down to -$9.20.

Re:Is it really that bad?

[Overzeetop]

Its only a good deal if you upgrade every year, and you would have bought Applecare.

For most of us, we upgrade when the carrier subsidizes, which effectively means once every 2 years. If we extend that to the non-subsidized world, it's $550, less the $200 you get selling your old phone, divided by two years, or $350. That's $300/year cheaper.

People may find value in spending twice as much for a new phone each year. They might find value in having Applecare. But there is a direct cost for having those things.

Re: Is it really that bad?

[Karlt1]

Not really any network. Different models of the phone support different LTE bands and I don't think they all support CDMA. The CDMA phones will work with any GSM carrier but may not support all of the LTE bands.

I dislike IOS devices -

[pecosdave]

Let's get that out there.

I think the drive to replace your phone at least once a year is shallow and an example of what's wrong with people in general.

That being said, if they develop a program to support the minority of people who must have the latest Hipster Phone when it comes out, by all means let it thrive. I'm not going to sign on, I see the problems with the program the built in expense, the money drain, etc... I would be tempted by a similar program, if one existed, for the latest HTC hardware with a straight up non-Sense ROM (Google Play Edition), but I probably wouldn't sign on to the program. I don't like cumbersome contracts and documented commitments. You have to earn my money each time I have to replace what I have. I'm married to my wife, not my phone. That being said as a Libertarian if people want to marry their mobile phones who am I to stop them? I think signing onto a commitment like this should involve photos, announcements on social media, and maybe even a ceremony, why be a closet contract signer, make a production of it!

Just because I don't support it doesn't mean I condemn it.

Re:I dislike IOS devices -

[FranTaylor]

Let's get that out there.

I think the drive to replace your phone at least once a year is shallow and an example of what's wrong with people in general.

That's what YOU think.

I think there are a lot of corporations and working people out there who feel that the current generation of phones is holding them back. They don't have enough storage capacity, they are too slow, they don't have the required features for their work.

But now a new phone comes along, it's quicker and does more. Remember these are working people who are making lots of money. Their phone is just a tool for them to use in their money-making tasks. The price of the phone is really quite small compared to the money being made. The increase in functionality provided by a new phone, will increase the ability to make money. If the phones really are getting better and better every year, then YES, there are a whole lot of people out there for whom it makes very good sense to get a new phone every year.

Re:I dislike IOS devices -

[pecosdave]

I'm a systems administrator, I do a lot of work through my phone and other devices. I replace my phones at about the rate I destroy them, right around the two year mark usually. I'm usually happier with the new phone, and I do appreciate the added speed, RAM, storage, whatever. Reality is though, if it weren't for the fact the previous one was limping along or dead I could probably work just as effectively from it. My old HTC Evo with WiMax was arguably the best network performing phone I ever owned, that WiMax was incredible when I had a signal and the phone was great all around. I've since gone through the Evo 4G LTE and I'm now on a One M8. The 4G LTE was slightly problematic, mostly due to the lack of a really good non-Sense ROM, but I can't honestly say my latest edition can do much the old WiMax couldn't do. In fact it was easier to get the old WiMax one hooked up to an HDTV, of course the newest can be used as a remote control. My old iPhone, a 3G model, is still being used as a music player, I found it to be not useful as a carry around device, it just couldn't do that much and I had to convert music to MP3 before I could even use it as a music player.

Moore's law is hitting its peak in the processor world, and we're hitting "peak technology" in so many other ways as well. We're no longer at the point where you trade a two year old 5lb phone on a 12oz phone with three times the battery life. Everything is tiny increments these days.

You're free to disagree.

It depends.

[halivar]

I have a mostly iOS household, but we do not upgrade every cycle. In fact, we usually skip two or three upgrades per device. And for the most part, I prefer to do so. The upgrade plan offers me nothing. Now, my friends who insist on upgrading every chance they get, this may be a better value proposition for them.

Re:It depends.

[Anubis IV]

Exactly. When you run the math, it ends up being pretty close to a wash if you're upgrading every cycle and getting AppleCare+ on each iPhone. Plus, it saves you the hassle of selling your old iPhone, while also giving you the benefit of not being tied to a cell carrier. It's an all-around win for people on that path.

But if you're skipping years or not bothering with AppleCare+, you'll be coming in hundreds of dollars below what their plan is demanding. I upgrade every three years or so to the latest mid-sized model (e.g. 32GB iPhone 4 -> 32GB iPhone 5s -> 64GB iPhone 7?), which works out to about $250/year before we consider any costs I can recoup from selling my old phone. Compare that to the $390/year I'd be paying Apple for their least-sized model, and it becomes apparent that their plan isn't made for people like me.

Which is fine, since not every product needs to be intended for my use. It kinda annoys me when folks fail to acknowledge that something can still be a good product even if it's not intended for them (not saying that you were doing so...just speaking in general).

Re:Who cares

[halivar]

There was no mention of Samsung Galaxy in the article.
/duck
/run

they need to spin it better

[argStyopa]

....just make sure the marketing message suggests that only the hippest, coolest, trendiest people join that program, and the Apple-ddicts will line up to sign up.

The Verge disagrees

[Anonymous Coward]

Appleâ(TM)s new upgrade program is the best way to buy the iPhone 6S

http://www.theverge.com/2015/9/9/9277775/new-apple-iphone-6s-price-cost-carriers

Re:The Verge disagrees

[Anonymous Coward]

Hahaha, the verge. One of the front runners for shirtstorm. They have no legitimacy.

It's slowing down

[Blaskowicz]

By now I believe even non technical people are realizing the phones are computers. Some PC computers became very tabletish (the ultrathin with rotating stand and keyboard, the outright tablets) and the phones computer-like, even the old and bad ones : it gets common to use external speakers on them, and perhaps known by some people that you can use an external monitor (usually TV).

But what I want to point out is they're becoming somewhat mature, and the specs are plateauing (display res maxed out, need to wait 3 years between semiconductor process shrinks). Smartphone life will probably increase : there was a time were desktop PC were worthless after two years, but that climbed to three, five and easily ten years or even more if you know what you're doing.
(Funnily you kept a 8/16 bit home computer or an XT longer than a mid 90s PC, as you at least had any kind of computer at all. Similar to keeping a dumbphone or feature phone for five years)
Android 5.1.x is perhaps a decent OS, Google even weakly hinted at support for third-world mobile phones (promised upgrade to Android 6.0, but maybe that doesn't mean much if that's a version around the corner).
iOS has the better "long term" hardware support.
There are less excuses to drop support, because hardware used to become actually obsolete (128MB or 256MB RAM or less, tiny flash, OpenGL ES 1.x). Now 1GB is slowly becoming the minimum, etc. Even Windows 10 supports 1GB RAM, although that was a low amount to run Vista or 7.

I would laugh at this but...

[hughbar]

I don't have a iPhone and hardly ever change my phone anyway. This is pure consumer fetish behaviour. However, these accelerated product cycles put a lot of toxic stuff into landfill, waste a lot of energy and don't provide any extra utility. Listen carefully for the sound of 'maximising shareholder value' by supplying a great deal of negative ecological externality.

Re:I would laugh at this but...

[unixisc]

I have an iPhone 5s, but have decided to skip the 6s and go to the 7, when available. Only reason I'm even considering that - so that I can use Apple Pay, but not before I've done the max on this phone. I have an iPad Mini 3, and don't plan to replace it, unless I need to go from 16GB to 64 GB.

Re:I would laugh at this but...

[Uberbah]

However, these accelerated product cycles put a lot of toxic stuff into landfill

How's that? You turn your phone into Apple as a part of the upgrade program, they will recycle the parts or reuse them to repair older phones, or sell then as refurbs.

You don't trade your phone into Apple, you'll sell it, give it away, or use it like an iPod touch. Or drop it in the recycling box at the front door of a Best Buy.

don't provide any extra utility

Faster processors and better screens don't "provide any extra utility"?

Not as bad as everyone is making it out to be.

[ChrisScott9084]

So I've spent some time looking at this deal, and while I would agree it's not the best deal in the world I don't think it's as bad as people are making it out to be. If you do the math using the basic iPhone 6, they are offering it for the price of $549 or $27.49/month on their plan. If you divide $549/24 it comes out to $22.90/month, but you need to factor in applecare which costs $99. $99/24 = $4.13 and that plus $22.90 = $27.03 so over buying outright you are paying .46/month more or a total of $11.04 over 24 months for the life of the contract. I guess the question to consider is how much do you value applecare. I personally don't think the terms are worth the $99 myself, but if you are 100% bought into the apple ecosystem and purchase applecare every 2 years for your phone upgrade then the extra $5/year might be worth the premium to have the latest phone each year. The one thing this might do though is get carriers to update their plans, because I do think this is a better deal than some of the carrier financing options, considering you get a new phone each year.

I honestly wonder

[ruir]

After so many comments, and people have not realised this is not about consumer loyalty or helping or deceiving the customer...this is about killing a very active 2nd hand market.

Re:I honestly wonder

[ColdWetDog]

After so many comments, and people have not realised this is not about consumer loyalty or helping or deceiving the customer...this is about killing a very active 2nd hand market.

Bullshit. This will affect, what, 10, 20, 30% of the iPhone sales? It's never going to be the dominant way to get an iPhone. The advantages really fit only a fairly small demographic - people with disposable income AND some deep seated desire to have the latest iPhone. While one could argue that the money would be better spent on psychotherapy or Cialis, people do what they will.

But there will be lots of extra iPhones for the refurb market. And if there isn't? Again, who the hell cares? There will be zillions of perfectly decent Android phones on the secondary market. And where exactly else will the Blackberry and Windows phones go?

Re:I honestly wonder

[ruir]

If you say so. Here people do not have much disposable income and the 2nd hand iphone market is HUGE. Get it, people do not really care about android either technically or as a status symbol.

How is this a bad deal....

[dablow]

...if you are the type who gets the new iPhone every year regardless?

This program is not for everybody, although it will likely suck in more people on the yearly phone upg train.

Re:How is this a bad deal....

[Anonymous Coward]

Actually, the worst-case for this program is people who *don't* get a new iPhone every year.
Without AppleCare, you break even (within a few cents), and own the phone at the end. (Rounding to the nearest dollar, you come out $1 ahead.)
With AppleCare, you come out a few bucks ahead, and own the phone at the end. (Rounding to the nearest dollar, you come out $10 ahead.)

This is actually a good deal for anyone.

You almost NEVER get a deal

[p51d007]

When you upgrade, be it a phone, contract or anything else from a carrier especially. I got off that constant upgrade crap a long time ago, going the pay full price, using a month to month MVNO. Last year, when people were scrambling to get an invite to purchase a phone from that snake Oppo/OnePlus company, I ran the numbers just to see how bad it was. At the time, the Galaxy S5? was one of the hot phones, and the OnePlus, was of similar specs (the company, on the other hand was too shady for me to deal with). Using the S5, on at&t, under contract, versus the OnePlus One, no contract, using straight talk, the savings over a 24 month period, it was over 80 dollars PER month, going with the OnePlus, versus the S5. The savings was so much, that you could spend the money going with the S5, full retail, stay off the contract, and go with an MVNO and still be money ahead. The problem is, people don't think long term in anything. When the uneducated economically types walk into the stores, they see RETAIL price xxxxx, contract price xxxxx and of course they think they are getting "a deal", but if they took the time, they'd see it wasn't. All you have to do is say to yourself, how can the carrier make money? It's called user fees, taxes and overcharging for data.

So What?

[AndyKron]

I don't own any Apple products.

Re:So What?

[ColdWetDog]

You wanna medal or something?

Re:So What?

[Marginal Coward]

Yes, but only if it's designed by Jonathan Ive.

Depreciation for independent contractors

[bidule]

I know independent contractors in Canada who'd rather rent their car and computer because the cost is 100% deductible on the first year. Buying thing means dealing with depreciation and getting your tax break later.

Re:Depreciation for independent contractors

[SuiteSisterMary]

Exactly. This isn't some sort of brand new, never-thought-of-before 'phone replacement plan,' this is a lease.

Re:Depreciation for independent contractors

[pubwvj]

Depending on the price of the item it may be deductible the first year even if bought. The threshold is pretty high. Look into it yourself before believing the leasing company propaganda. Remember, their objective is to get you to lease so they can charge you a higher price than if you bought. It may well (likely) be a bad deal.

You lost me at $120/mo

[Anonymous Coward]

You lost me at $120/mo. Sure, if you pay a gazillion dollars for your service, even buying a new iphone every few months might make sense. Can't you get something cheaper? I pay £7.5 per month (for 1GB data, 500 minutes, 5000 texts - well beyond what I use), so something like getting a £100 phone per year is more than my service anyway. What I do actually is get a £200-£300 phone every 2 years or so. I do have an iPhone (actually two, a 4 and a 6plus) but they are provided by my work and I don't like using iOS that much on my personal phone, so I buy a separate Android to carry around.

Re:You lost me at $120/mo

[xtal]

There is no cheaper service. There is one carrier where I live with a network that has LTE.

Canada has the highest fees in the world for mobile.

Re:You lost me at $120/mo

[Anonymous Coward]

Hahaha Mexico has you beat by a lot, also see any island nation.

Re:You lost me at $120/mo

[Anonymous Coward]

They meant Canada has the highest fees in the world for mobile for countries that aren't fucking shitholes that'll give you crazy squirts if you drink the water.

Recurring revenue

[adam525]

As far as I can tell, it's the first rule of business - Figure out a way to generate recurring revenue. What business owner wants to get $500.00 from you one time and then take their hands out of you pockets? Most of these greedy bastards would take everything you have and leave you homeless if they got the chance. I worked for a major cell phone provider and it was miserable under the regime I was working for.

First of all, they hope that there are lots of "features" on your phone that you pay for and don't use or even know about.

I'll give an example : this company rolled out a "pay per use" data package and sent it to EVERY customer (even the ones with flip phones where data is basically useless) and didn't tell them about it. When these devices have a data connection they use it whether it's intentional or not.

I had tons of customers calling in saying "What is this Pay Per Use Data" on my bill? By the way, I want all of that money back.

I would go to my supervisor and was told to reimburse the customer for _some_ of the charges and then try and sell them some OTHER useless feature. It made me sick to my stomach to do that to another human being. By the way, this is leaving out all the customers who don't look at their bill and just pay it.

After that experience (luckily I don't work for those a-holes anymore) I started paying more attention to how other businesses billed for certain things and learned that this is a pretty common practice - get as much money as you can for as little as possible.

I don't mind someone trying to make a buck. We all have to have a living, but to outright rip someone off to make your living is sickening.

Re:Recurring revenue

[Anonymous Coward]

But Apple does not do that. They don't try to see you more stuff. And they take returns no questions asked. In most cases, they outright replace items out of the warranty period if they (or any suppliers) have any fault. This rental program is not for me, but if you can switch to a cost cost provider like GoSmart, it pays for itself plus gives you an upgrade every year. Apple recycles the phone, or sells it refurb, so no garbage created by people who are on the program.

Re:Recurring revenue

[FranTaylor]

Another first rule of business is "don't sweat the small stuff". If you lease a phone then have so much less to worry about. You don't have to worry about repairs or loss or an obsolete old phone. When you are making lots of money there is really no time to screw around with these things. Why do you think that companies lease cars and trucks? It's because they don't want to deal with upkeep and maintenance. They can write a fixed check every month for a fixed service and they can rely on it.

If the phone is so bad...

[danbob999]

that you have to replace it after 12 months, maybe it wasn't a good phone to begin with. Such crap must sell for less than $100, isn't it? Oh wait...

Re:If the phone is so bad...

[FranTaylor]

does this apply to car leases as well?

Re:If the phone is so bad...

[danbob999]

Well, I agree that many people buy/lease cars which are too expensive for their income.
Rich people should buy cars outright. However I understand that poor people can't easily spend $20k at once on a car. Ideally, they should be saving until they have $20k (or get a cheaper car), but they might need the car sooner (to go to work) therefore I understand it may not be practical.

But you should never get a loan of $700 for a luxury phone.

Re:If the phone is so bad...

[FranTaylor]

I understand that poor people can't easily spend $20k at once on a car.

Where is the straw man you are talking with, who says that everyone must lease a car, and there are no other alternatives?

Re:If the phone is so bad...

[danbob999]

What I said applies to both financing and leasing.

Actual math

[fulldecent]

Here is the normal total cost of ownership calculation for comparison.:

ONE YEAR UPGRADE CYCLE:
iPhone 6 64GB in 2014: $750
Decent eBay price in 2015 : -$450 (plus shipping)
Minus eBay fees: -$54
-----
TCO: $246 or $21/mo

TWO YEAR UPGRADE CYCLE:
iPhone 5s 32GB in 2013: $750
Decent eBay price in 2015: -$275 (plus shipping)
Minus eBay fees: -$33
-----
TCO: $442 or $18/mo

What if it's secretly about Android?

[RogueWarrior65]

I read an article about this in Thursday's WSJ. The article said that it's about shifting control of the customer from the carrier to Apple. I'm sure that's true but I wonder if goes a little deeper. What if part of the goal is to prevent the carriers, who don't work for Apple, from convincing a customer to go with Android. Maybe the carriers are getting more profit margin by pushing a non-Apple product. If you set the way-back clock to the mid 90s, Apple was really struggling to sell their products in the computer stores of the day e.g. CrampUSA. PCs were a commodity item and yielded a higher profit margin for the resellers. This is one reason why Apple took the step of building their own stores.

Re:What if it's secretly about Android?

[Anonymous Coward]

Um, just to clue you in but it seems that this may have more to do with Verizon dropping their subsidized phones in lieu of Verizon Edge.
 
Just consider it.
 
I don't want to call whoever wrote this for the WSJ obtuse but... well, just sayin'.

Re:What if it's secretly about Android?

[stevez67]

Edge died too. All subsidies are gone. So the only question you need to ask is who do you prefer to pay.

Suck them dry

[Tough Love]

Suck them dry, they like it. And Apple needs money more than they do.

If you can't afford it upfront...

[danbob999]

you can't afford it monthly either. Seriously, Altough it is damn expensive for a phone, it is really cheap compared to a car or a house. I don't see why anyone would need to finance it. If you do, you should be buying a cheaper phone anyways.

Re:If you can't afford it upfront...

[FranTaylor]

you can't afford it monthly either. Seriously, Altough it is damn expensive for a phone, it is really cheap compared to a car or a house. I don't see why anyone would need to finance it. If you do, you should be buying a cheaper phone anyways.

"afford" is not the criteria. corporations can "afford" to pay a lot of money, that doesn't mean that they do.

Re:If you can't afford it upfront...

[Anonymous Coward]

In general financing something is going to cost you more. If you're upgrading your phone once a year anyway this seems to actually save you money. Over two years you'll spend $600 on this program versus buying two $600+ phones in that same time period.

desperate move

[xombo]

This just seems like a desperate move on Apple's part.

1) It says to investors that existing buyers have dried up and they need to start looking at lower-income consumers to get their sales numbers up.

2) It says to their existing customers that Apple's products are no longer high-end and exclusive and are now something even the poorest of the poor can afford.

What do you think would happen to D&G or Gucci's brand if they suddenly started ADVERTISING that their bags are available for $1 a day? I mean, it's one thing to have in-store credit that's discreetly available; it's entirely another to advertise to the world that you're essentially a rent seeking consumer vampire.

I just buy a new one every two years

[WillAffleckUW]

For cash.

Cash, it's this great thing, better than credit cards. Everyone takes it. There are no service fees. When you run out, you just get more. If you have no more left, you stop buying things, and you never go into debt!

buying makes sense if you hold onto it

[Chirs]

Renting/leasing a phone (or a car) generally only makes sense if you have to have the new shiny all the time.

It'll likely work out cheaper to buy a used high-end phone (or a new midrange one) and use it till it doesn't work anymore. The long-term ownership is where you save money by buying vs leasing.

Re:buying makes sense if you hold onto it

[edtice1559]

I would tend to argue that nobody "needs" to have the shiny new all the time. The only reason you can buy a used mid-range anything for a decent price are because of people who *want* the shiny new all the time (otherwise they would have held onto the items). But I think you are kind of proving my original point which is that buying and/or renting the shiny new all the time is just fine as a form of recreation if you can afford it. But the decision to rent the shiny new vs buy it doesn't really matter. Sometimes there are really good lease deals out there especially on cars because you get a guaranteed price at the end of the lease so you're not taking residual value risk. (An open-end lease on a vehicle would be insane). But you shouldn't put a price on the ephemeral value of ownership for ownership's sake. Assets that depreciate are a much different thing that assets which appreciate. No matter how you look at it you are really just renting the former. OTOH owning the latter is a big deal. It's easy to buy the former and *feel* like you are doing the latter and thus make bad decisions. I'm cautioning against this.

if you have to have the latest shiny it make sense

[Chirs]

But for most people it doesn't, since most people don't really need a new top-end phone every year.

headline isn't wrong

[Chirs]

It's a good deal if:
1) you upgrade every year
2) you take out Apple Care

For everyone else it's not a good deal.

actually I do use it till it breaks

[Chirs]

Phones are different than computers, yet people still try to apply the computer mentality to it. You don't just buy a smartphone and sit back and use it until it breaks.

Actually, I do. I used a Blackberry Curve with the rollerball until it physically broke. I then got a free Android phone from my brother and used it till it broke. I have an HP Touchpad running CyanogenMod and I'm going to use it till it breaks. My current phone is a Moto G, and I fully expect to use it until it breaks.

If the vendor abandons it, you reflash it with a community distro. Simple as that...

Not true at all

[Anonymous Coward]

You are buying the phone. After you've made 24 payments, the phone is yours. Apple is giving you the option to trade in your phone after one year. You're just paying about 15% interest on the phone.

Re:Not true at all

[Anonymous Coward]

You have it *almost* right. The guy who wrote the linked article listed the wrong price for AppleCare for these phones. For the current and prior generations of phones, AppleCare is $99. For the 6s generation of phones, it is $129. (I have absolutely no idea where he came up with $79.)

If you use the correct pricing, you find out that you're actually *saving* about $10 over the 'buy it up front' price if you get it with AppleCare, and doing so with small payments over the full 24 months. If you *just* get the phone, you're pretty much dead on, paying within a few cents of the same price as if you buy it up front, but again, doing so with small payments over time.

This *sounds* counter-productive for Apple, until you realize that it gives them *much* more consistent operating revenue when people do this, rather than getting huge spikes of income in the month or two following the release, and then comparative droughts for the rest of the year.

Re:Not true at all

[DigiShaman]

Ok, so it's a lease to own plan then?? You own the phone after two years? But if you want to upgrade each year, do you lose the equity put into the first 12 months? Or would that be prorated?

Small difference, lotsa drama

[stevez67]

The difference between a 24 month installment contract on an iPhone 6s (and getting a new phone every 24 months) and the iPhone upgrade program is way over blown. The only difference is who you pay and what you get in return. In the former you get a phone that in 12 months becomes slightly dated and less efficient and have to purchase either a 3rd party insurance plan (usually through your carrier). In the latter you pay Apple, get Apple Care insurance, and you're always using the most recent version of your smart phone. Pick your poison.

iPhone isn't exactly a bargain to begin with

[Tony Isaac]

Apple has never considered "good prices" to be an important business strategy. If a couple hundred dollars are important to you, you should save your money by going with an Android phone. If being part of the Apple universe is important to you, then tighten your belt and pay up!

Vendor Financed Sales

[Anonymous Coward]

Nothing more than this. It always ends in tears.

Mark Wilson writes: ..

[nickweller]

"You may have heard that Apple had a little get together today. There were lots of big launches — the iPhone 6S, the iPhone 6S Plus, and the iPad Pro. Those waiting for an iPhone fix were given quite a lot of get excited about, but like your friendly local drug dealer"

Stopped reading when I got to here .. shame on you slashdot for posting this garbage ...

Stupid Article

[CanadianMacFan]

Author goes on to say that the difference between buying it outright and two years of monthly payments goes to Apple after pointing out that the person is signing up for a loan provided by a bank. I somehow doubt that the bank is doing this for free. I am guessing that Apple is not seeing anything above the cost of the iPhone and the difference is going to the bank. Apple gets two things from this. The first is that their income is spread out through the year. Right now they have one huge quarter that dwarfs the others. The other thing is that they have some certainty in the number of units of the next iPhone they are going to sell.

captain obvious

[allo]

Apple is going to give away money? No, of course not. If they make a offer, they want profit. And who doubts this?