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

[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

[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

[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

[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

[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

[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

[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.

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::

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.

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.

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: 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...