Who’s better off in Apple’s Upgrade Program? Apple or the consumer?

Just_Me_D

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Since Apple has joined the band of retailers offering an upgrade program, is it possible that Apple has chosen to price its new flagship starting at $999 to get more people into its upgrade program? Think about it. A good deal of outright buyers keep their devices for two years. Afterwards many of them either keep the device, pass it down or sell it. By joining the upgrade program, Apple would get at least half the price of the device monetarily, as well as the device itself which it can then re-sell as refurbished, use it as an exchange for a damaged device or donate it. It’s a win-win for Apple. What do you think?
 

anon(50597)

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Since Apple has joined the band of retailers offering an upgrade program, is it possible that Apple has chosen to price its new flagship starting at $999 to get more people into its upgrade program? Think about it. A good deal of outright buyers keep their devices for two years. Afterwards many of them either keep the device, pass it down or sell it. By joining the upgrade program, Apple would get at least half the price of the device monetarily, as well as the device itself which it can then re-sell as refurbished, use it as an exchange for a damaged device or donate it. It’s a win-win for Apple. What do you think?

Apple all the way.
Renting an iPhone for $500 a year is not a deal for consumers. It just seems like it because they can afford the monthly payments.
 

nikkisharif

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Apple all the way.
Renting an iPhone for $500 a year is not a deal for consumers. It just seems like it because they can afford the monthly payments.

^This....unless you’re a consumer that doesn’t upgrade every year. I know people that use the upgrade program as a convenience because they don’t want to shell out the lump sum at one time. In this instance, it’s the consumer.
 

Alex Rodriguez Jr.

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I do the AT&T Next program. Before that, I was buying a new phone every year, selling the old one and buying the new. Then I got my 6 Plus and held onto it for 3+ years. Biggest regret of my life as I use my phone for productivity reasons - my entire business depends on me having a working phone. I decided with the X to get a new phone every year. Doing that program works for me. In 2 years, I pay the price of the phone (AT&T splits the payments evenly over 2 years, I can upgrade at 1 year without any fees) but I get an upgraded phone half way through. I’m always paying the same amount, but I am getting a new phone. Looking at it this way, I don’t see how the consumer loses, unless Apple’s works completely different.
 

salscott

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This is my second year of the apple program and I'm probably leaving $200 or so on the table per year for not having to sell my old one nor putting out nearly $1,500 in this case.
Might be my last year on it.. Maybe
 

anon(50597)

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If the cost is the same as buying it outright, how is it any more expensive?

If you had purchased the phone you could sell it and make some money back.
Once they have you in this program you are hooked. You pay more and more as prices go up, you can’t purchase a different phone, a used phone, an Android phone, from a marketing standpoint it is brilliant.
As someone above said, for them they want a new phone every year because they depend on it for their business. Makes sense and they can write it off. For the average consumer they do it for the lower monthly payment. Just like leasing a car they can’t afford to buy.
To each their own though. We all have different needs and circumstances. This is just my personal point of view.
 

nikkisharif

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If you had purchased the phone you could sell it and make some money back.
Once they have you in this program you are hooked. You pay more and more as prices go up, you can’t purchase a different phone, a used phone, an Android phone, from a marketing standpoint it is brilliant.
As someone above said, for them they want a new phone every year because they depend on it for their business. Makes sense and they can write it off. For the average consumer they do it for the lower monthly payment. Just like leasing a car they can’t afford to buy.
To each their own though. We all have different needs and circumstances. This is just my personal point of view.

I get it. I was speaking of the folks that actually keep their device for 2 years. I also don’t think it’s a matter of affordability or not. Some people do it because they just don’t want to shell out that money in one lump sum for a phone. Doesn’t mean that don’t have the money. In my situation, I use to buy all my phones outright, then I tried the monthly program with Verizon and twice they messed up on their end, so I got 2 devices for the price of tax...one of those was my X. I had the money, just felt like shelling out $90 instead of $1000 at the time.
 

anon(50597)

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I get it. I was speaking of the folks that actually keep their device for 2 years. I also don’t think it’s a matter of affordability or not. Some people do it because they just don’t want to shell out that money in one lump sum for a phone. Doesn’t mean that don’t have the money. In my situation, I use to buy all my phones outright, then I tried the monthly program with Verizon and twice they messed up on their end, so I got 2 devices for the price of tax...one of those was my X. I had the money, just felt like shelling out $90 instead of $1000 at the time.

If you lease and keep the device for 2 years you paid $500 a year for the device. Apple then refurbishes the device and sells it for $500. They made $1500 on that device and you paid $500 per year with nothing to show for it.

If you purchase it for $1000 and sell it after 2 years for $500, you paid $250 per year for it and Apple only made $1000.

There certainly can be individual circumstances where leasing works out. We are all in a different boat financially and situationally. I’m not saying everyone who leases is doing it because they can’t afford it but I would be willing to bet it’s a large number who do. Otherwise the car dealerships and Apple wouldn’t bother.
 

nikkisharif

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If you lease and keep the device for 2 years you paid $500 a year for the device. Apple then refurbishes the device and sells it for $500. They made $1500 on that device and you paid $500 per year with nothing to show for it.

If you purchase it for $1000 and sell it after 2 years for $500, you paid $250 per year for it and Apple only made $1000.

There certainly can be individual circumstances where leasing works out. We are all in a different boat financially and situationally. I’m not saying everyone who leases is doing it because they can’t afford it but I would be willing to bet it’s a large number who do. Otherwise the car dealerships and Apple wouldn’t bother.

It’s only a lease if you decide to turn it in before you’re finished paying. Once you’re done paying, it’s yours to keep.
 

anon(50597)

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It’s only a lease if you decide to turn it in before you’re finished paying. Once you’re done paying, it’s yours to keep.

See, I didn’t know that.
So if after a year you want a new device you hand it in and get the latest phone?
If you keep it for 2 years (pay it off) it’s yours to sell?
In this case you would only lose by handing it in every year.
 

nikkisharif

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See, I didn’t know that.
So if after a year you want a new device you hand it in and get the latest phone?
If you keep it for 2 years (pay it off) it’s yours to sell?
In this case you would only lose by handing it in every year.

Exactly! It’s only a loss, if you choose to turn it in.
 

Alex Rodriguez Jr.

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See, I didn’t know that.
So if after a year you want a new device you hand it in and get the latest phone?
If you keep it for 2 years (pay it off) it’s yours to sell?
In this case you would only lose by handing it in every year.

Yes.

But I disagree. Apple devices haven’t skyrocketed in price with the exception of last year. I’m paying the exact same as I was and I’ll now have the Xs. You’re all also ignoring the cost of my time and effort in selling the phone (my time is money) and you’re assuming people would sell after one year. Let’s say the price goes up next year, I would need to sell my X for less and pay more upfront for a more expensive phone.
 

anon(50597)

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Yes.

But I disagree. Apple devices haven’t skyrocketed in price with the exception of last year. I’m paying the exact same as I was and I’ll now have the Xs. You’re all also ignoring the cost of my time and effort in selling the phone (my time is money) and you’re assuming people would sell after one year. Let’s say the price goes up next year, I would need to sell my X for less and pay more upfront for a more expensive phone.

There are lots of ways to look at it. It works one way for some and a different way for others.
 

BreakingKayfabe

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All these “upgrade” programs are mostly one-sided for the company offering it. I see a lot of “well I’m getting a new phone so might as well upgrade with the plan and make the same payment.” So if someone really wanted to upgrade from an X to Xs even though they know it’s hardly an upgrade, go ahead. But you’re better off using what is virtually the same phone for the next year, finish paying it off, and being the owner of it a year after so you can just sell it on your own and use that money towards an actual upgrade.
 

qbnkelt

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See, I didn’t know that.
So if after a year you want a new device you hand it in and get the latest phone?
If you keep it for 2 years (pay it off) it’s yours to sell?
In this case you would only lose by handing it in every year.

I always pay mine down to the week of the new device coming out. Then I pay it off. I put three hundred down on the AT&T Next program, get the new phone, and give the old device down.

So I get a new phone every year and a family member (usually one of the nephews/nieces) gets a new phone.
 

iN8ter

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Apple.

Otherwise they would not offer it.

Pretty simple, IMO.

Businesses always operate in their own interests, not yours. Money matters more than the customers.

If they can abandon half their users and turn a profit, they’d do that, too.
 

iN8ter

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I get it. I was speaking of the folks that actually keep their device for 2 years. I also don’t think it’s a matter of affordability or not. Some people do it because they just don’t want to shell out that money in one lump sum for a phone. Doesn’t mean that don’t have the money. In my situation, I use to buy all my phones outright, then I tried the monthly program with Verizon and twice they messed up on their end, so I got 2 devices for the price of tax...one of those was my X. I had the money, just felt like shelling out $90 instead of $1000 at the time.

If you keep it for 2 years you aren’t going to recoup enough cost for painless out of pocket upgrade at that point, so it still leaves most people tied into the upgrade program.

Many will simply trade the old phone in to being the cost of the new phone down, and lower the monthly bill.

Contracts were a much, much superior option for those users. They often got their new phone for free or on discount; and their bill didn’t balloon by $40-50.

Lease options were done to help phone OEMs well more devices and allow carriers to raise their profits by selling device access (waives when you’re leading, but falls off when you pay off the phone meaning you barely save anything beyond device cost after you move off a contract plan).

If you’re still on a contract plan, do whatever you can to never let it go. It isn’t worth it.
 

iN8ter

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Yes.

But I disagree. Apple devices haven’t skyrocketed in price with the exception of last year. I’m paying the exact same as I was and I’ll now have the Xs. You’re all also ignoring the cost of my time and effort in selling the phone (my time is money) and you’re assuming people would sell after one year. Let’s say the price goes up next year, I would need to sell my X for less and pay more upfront for a more expensive phone.

Prices have inches up every year since the 6s. And the Plus models debut at $100 over the smaller size.

So the prices have been going up, for years. They’re just very tactful about it. $15 one year, $20 the next. Every year users think “no big deal,” but they aren’t doing the math.

Before you realize it, you’re paying $50-100 more for a device; a device that barely offers anything advantageous over that which you’re replacing.

That’s on top of the increased costs for storage upgrades.

That’s how second tier Plus model prices went from $850 to $950 at second tier storage SKU.

You didn’t notice that price increase?
 

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