Other Carrier Pricing vs Apple Pricing for Yearly Upgrades. What is the Math long term?

[tekfranz]

So in 2021 the carriers gave customers $1000 or so off of an iPhone Pro. It is in monthly installments so about half of the iPhones are paid for by the time a new iPhone comes out. At that point a customer could switch carriers and get the next iPhone for free, presumably.

Meanwhile Apple has a yearly upgrade program where you pay a set amount each month. I think most would agree that it is a much better experience dealing with Apple on upgrades and trade-ins than with the cellular carriers.

What I would like to figure out is what my yearly phone cost would be with Apple Financing vs Carrier Promotions and financing. On the one hand with Apple I have to pay fiull market price and trade-in my phone an close depreciation. On the other hand with carrier financing I may need to pay off the device before switching carriers to take advantage of a new deal, although some carriers pay switching costs, but that may not include getting a promo on a new iPhone.

I am also thinking about this in regard to multiple lines so it is not just a single equipment purchases but multiple iPhones on multiple lines. So any strategy I choose needs to be good for multiple lines and buying outright would be a larger investment.

 

[now i see it]

It’s simple math: addition and subtraction.

 

[OhMyMy]

It’s simple math: addition and subtraction.

Then why don’t you do it?
If you’re not going add to the solution with your snarky comments then you’re irrelevant.
Some are inherently bad at math and there’s nothing wrong in asking for help which is what I believe is OP’s situation. And they’re probably looking for help with other factors like resale value etc.
So for someone who claims they see it now, you obviously don’t.

 

[traveltoromantis]

This is kind of a loaded question. You would probably be better off going to a carrier store or third-party (like Best Buy, where they don't make commission) for an answer.

 

[Fred Zed]

I don’t think I’ll find a better deal than what Best Buy USA offered. It worked out by me trading in an iPhone 12 PM and giving them $229 to get an iPhone 13 PM. Will this be ever repeated? I doubt it. Covid

 

[JPack]

It’s not a question that can be answered by anyone but yourself.

Some people use very little data and a $15 prepaid plan will do. If you give a 50GB plan to them, it doesn’t add value. Other people want the ability to switch carriers for a better deal on a moment’s notice.

 

[B_mark_R]

Carriers will give you a free device via monthly credits, usually over 36 months, 3 years. After 1 year you will owe $666. After 2 years $333. If you want to switch carriers and keep your number you'll have to pay off your device to release your number. If you want to trade in your device to Apple or sell it using a service like swappa or gazelle you'll have to pay it off. Apple does 24 month financing and won't give you anything for free. Because it's 2 year financing, you'll owe $500 after the first year and fully paid off after 2 years.

 

[rui no onna]

Depends on whether you normally buy AppleCare+ or not.

The $700-1000 off promo from carriers only works out if you already have a paid-off device you can trade-in.

For carrier financing, after 12 months, you still have anywhere from 50-66% balance remaining. If you wish to take advantage of new trade-in offers, you'll need to pay off the remaining balance. For the base iPhone Pro, that's a one-shot spending of $2000-$2700 for device pay off come upgrade time for a family of 4. This doesn't include the cost of AC+ in case your family tends to be accident-prone.

Apple's iPhone Upgrade Program is more straightforward. You pay $50/mo (AC+ included) per device or $200/mo ($2400/yr) for a family of 4.

If you don't need AC+, a 24-month payment plan with the carrier works out better. 30-36 month plans? You're better off going with Apple iUP.

This doesn't factor in reselling or non-promo trade-in values which can vary.

 

[tekfranz]

It’s simple math: addition and subtraction.

Heard of that already. Think in Europe they call it maths

 

[BigBlur]

So in 2021 the carriers gave customers $1000 or so off of an iPhone Pro. It is in monthly installments so about half of the iPhones are paid for by the time a new iPhone comes out. At that point a customer could switch carriers and get the next iPhone for free, presumably.

Not necessarily, the phone still needs to be paid off. If you pay off the remaining balance early, you won’t get the rest of the $1000 or so credit (around $500 if you pay it off mid-way through). Some carriers have had promotions to pay off the rest of the phone for you when you switch, but that isn’t always the case. There’s the fine print and gotchas to worry about too.

As others have said, only you can really answer this question that best applies to your situation. Promotions, plans, contracts, bundles/perks (ex. Verizon’s Apple Music or Disney+ bundles), etc. are different for everyone. How often you upgrade is another factor too.

For example, my parents upgrade every three or four years. The best deal for them is actually just buying the phone at full cost so they can keep their existing cheap data plan. Most promotions require upgrading to the carrier’s current plans, which generally cost more. If they were to go that route, it’d cost them significantly more in the long run even though they may have gotten a free phone.

As for me, a loyalty trade-in promotion was the better deal. I bought a used $30 iPhone 6S to trade in for $600 (normally valued around $30-$40 during non-promotional periods) towards the iPhone 13. That allowed me to keep my XS as a backup, give to my parents, or to trade-in/sell later for even additional cash if I want to. I also take advantage of Verizon’s bundles/perks, since it’s cheaper bundling with them rather than paying for everything I already had separately.

I would suggest starting a spreadsheet to list out all your options, so you can compare them. It’d probably be best to wait until you’re actually in the market to buy a new phone since the promotions are always changing. It may be better to go through Apple one year, and a promotion with a carrier another year. Generally, I’d say the carriers have the better deals if you know what to look for.

 

[tekfranz]

Depends on whether you normally buy AppleCare+ or not.

The $700-1000 off promo from carriers only works out if you already have a paid-off device you can trade-in.

For carrier financing, after 12 months, you still have anywhere from 50-66% balance remaining. If you wish to take advantage of new trade-in offers, you'll need to pay off the remaining balance. For the base iPhone Pro, that's a one-shot spending of $2000-$2700 for device pay off come upgrade time for a family of 4. This doesn't include the cost of AC+ in case your family tends to be accident-prone.

Apple's iPhone Upgrade Program is more straightforward. You pay $50/mo (AC+ included) per device or $200/mo ($2400/yr) for a family of 4.

If you don't need AC+, a 24-month payment plan with the carrier works out better. 30-36 month plans? You're better off going with Apple iUP.

This doesn't factor in reselling or non-promo trade-in values which can vary.

Yes this got my brain thinking down the right track.
The carriers make you surrender all the "equity" in you trade-in when you mail it off. In exchange they give you monthly off-setting discounts. When upgrading you payoff your device and this ends up costing you a lot as you pointed out. So after two years with Carrier Promos, you may have had to payoff your device twice.
Carrier total two Year Charge: $1391.76

Apple on the other hand has the plus of giving you something for your trade-in (or your initial trade online) to reduce your payments. You pay more monthly but there is no charge to upgrade.
Apple Upgrade Program Total Two Year Charge: $949.04

So the carriers are cheaper monthly and nail you with the payoff at upgrade time while Apple charges all along but then the upgrade is free.

Some caveats are a carrier (like Sprint did) might offer to payoff your device and give you a free iPhone or you may be able to sell your phone at a good profit somewhere along the way.

Here are my calculations if anyone is interested: