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T-Mobile and AT&T Offer Frequent Device Upgrades — For a Price

Earlier this month, T-Mobile announced a new paid upgrade plan called Jump, which lets you trade in your smartphone and purchase a new subsidized smartphone every six months, for a $10 monthly fee. Since that announcement, AT&T has jumped into the game with its new Next upgrade plan, and Verizon has confirmed that it will follow suit in August with a service called Edge.

These plans probably aren’t worthwhile if you’re an iPhone user, since Apple releases only one model per year, and tends to offer staggered updates, where one year sees the iPhone 3G or iPhone 4, and the next sees the tweaked iPhone 3GS or iPhone 4S. It’s not a stretch to guess that the next iPhone will be called iPhone 5S, and won’t be a quantum leap over the iPhone 5. Plus, Apple supports its iOS devices for years, something that’s uncommon among Android handsets. iOS 7, due later this year, will support the iPhone 4, which was released over three years ago. Some pundits have criticized Apple for its slow phone update cycle, but most normal people don’t want to feel as though their expensive smartphone is obsolete after a
few months.

Jump for Toy — Yet, if you prefer Android or Windows Phone devices, which are constantly being iterated, then Jump might make sense. The Verge’s Nathan Ingraham did the math to tease out the savings. An unsubsidized Samsung Galaxy S4 costs $579.99. If you purchase it through an installment plan on T-Mobile with Jump, you’ll pay $99.99 up front, plus $30 per month for Jump. If you upgrade after six months, you’ll have paid $279.99 for the use of the initial Galaxy S4 for that time. If you upgrade twice in the year, you’ll pay $559.98 total for two smartphones, which is
slightly less than the cost of one unsubsidized phone. The catch, of course, is that you don’t get to keep the Galaxy S4 — when you upgrade, you have to trade it in.

Jump isn’t a bad deal, but it’s an extreme niche: gadget enthusiasts with disposable income who can obtain satisfactory service from T-Mobile’s network, which isn’t as extensive as Verizon’s or AT&T’s. On the upside, Jump also serves as an insurance plan, so if you buy carrier insurance, which already runs $8 a month from T-Mobile, then you might as well Jump. In my experience, however, carrier insurance is a rip-off — AppleCare+ and Square Trade are
less expensive at $99 for two years of coverage, and often work better.

While I admire T-Mobile’s commitment to transparency and innovation, like many Americans, there’s not a bar of T-Mobile service anywhere near my house. So anything T-Mobile does is a complete nonstarter for me.

The Next Big Ding — If you’re an AT&T customer looking to upgrade more often than every two years, you might be tempted by the company’s new Next plan. But The Verge has again done the math, and Nilay Patel summed it up best: “No no no no no no no.” Next is more expensive than Jump — costing between $15 and $50 a month — and allows only one upgrade a year. Plus, AT&T’s pricing plans, unlike T-Mobile’s, build device subsidies into their service fees. So you’ll be paying more than you would with T-Mobile for the hardware, then paying for the phone
again with your service, and you won’t even get to keep the phone. You’re better off buying an unlocked Galaxy S4 and AT&T service separately.

Why are these plans being introduced so quickly? As Kevin Tofel of GigaOM discovered: people aren’t upgrading their smartphones. (Bad consumers! Bad!) This is an issue for carriers who have spent billions on more-efficient LTE networks. They want to be able to justify their investments, and also reduce their data costs. In the case of AT&T, since the company is effectively double-charging for its phones, Next will be a cash cow. If the reports are to be believed, Verizon’s plan will be similar,
making you pay for half of an unsubsidized device before upgrading, all while paying the same service rates as customers who purchase subsidized phones.

Overall, these developments make me happier than ever to be an iPhone customer. My first smartphone was a Droid, purchased in November 2009. However, Motorola stopped updating its “flagship” phone after only a few months. Meanwhile, the phone I replaced it with after only a few months, an iPhone 4, will be compatible with iOS 7 and will likely be supported until sometime in 2014. The iPhone 5 I replaced that with will likely be supported for just as many years, and, despite my dropping it numerous times, without a case, it still looks and works great (other than the chamfer scuffing that’s endemic to the black model). Apple’s products aren’t perfect, but they age far more slowly and gracefully than most consumer

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