Users on the United States’ second largest mobile carrier will now have to wait until the full-term of their contract is over before upgrading their device.
Announced today, the change in AT&T’s upgrade policy effectively means that users will have to wait until their contract is completely up before upgrading their device. Until now users on AT&T and Sprint were still able to upgrade two months before their contract expired. Following this announcement, only Sprint’s upgrade policy is left standing.
In April, Verizon announced that it would be ditching its early upgrade policy in favor of just allowing users to upgrade on the day they renewed their contract – exactly what AT&T is planning to do.
T-Mobile, the nation’s fourth-largest mobile carrier, ditched contracts for all of its new users in favor of letting them pay an up-front down payment and then the balance of their device’s cost in monthly payments spread over two years. T-Mobile’s users can also pay off the cost of their devices early, forgoing any further monthly payments and gaining the ability to upgrade their device.
The wireless industry’s move away from early upgrades will likely do relatively little damage to sales of Apple’s iPhone, as Apple seems to have settled into a predictable pattern of releasing a revamped device one year, followed by a slight upgrade to that same design the year after. With that cycle, users are less likely to be burned by having their device constantly obsoleted by the time they’ve made it to the end of their two-year contract. It’s this cycle that makes it likely that Apple will announced an iPhone 5S sometime this year.
On the other hand, early upgrades have been great for Android users looking to get their hands on the latest handsets. They will now have to contend with a near universal two year upgrade cycle in an ecosystem that is constantly changing and releasing new devices with new updates at a break neck speed. Most Android device manufacturers have settled on yearly updates to most of their line.
While all mobile carriers offer the ability to just buy the device out of pocket and forego any contract, many of today’s top of the line smartphones are simply too expensive to do so without the subsidy that waiting for upgrade pricing provides. For example, the Samsung Galaxy S4 is currently $639, without a contract. Apple’s iPhone 5 costs users $649 without a two year contract.