Notes on updating an iPhone in 2016

If you’ve read my blog (and I imagine the three of you currently doing so have done so before), you know I’m an Apple guy of long standing. Of course I was watching the keynote where they announced the iPhone Upgrade program, in which you can update to a new phone every year for a moderate monthly payment with no carrier contract*. But I didn’t fully undersand how the program worked.

Historically, I’ve been on the cycle for iPhone upgrades, starting with the 3GS, and with a January upgrade date. So I went to the Apple Store to get the scoop on the Upgrade program. Here’s what I learned (or re-learned):

  1. Subsidized iPhones are a thing of the past, at least for the high end models. You used to pick a price point ($199, $299, $399, whatever) and accept a two year contract with the carrier. But that’s a thing of the past. You can basically choose either to pay full price for the phone (starting at $649), or you can pay a monthly fee either to your carrier of choice or to Apple. Net result: you pay more, because your data plan isn’t correspondingly cheaper.
  2. I am paying for too much data. I have a legacy AT&T Unlimited data plan, but I only ever use about 2.7GB of data a month, based on a year’s worth of usage data. I could save a chunk of change by rebalancing my data plan, almost enough to pay the monthly charge for the phone.
  3. There are good reasons to rent your phone from Apple rather than the carrier. For one, the phone you get from Apple is carrier unlocked, meaning you can switch to a different carrier. For another, the monthly price to Apple includes AppleCare.
  4. It’s harder to avoid getting the high end model. My iPhone 5s was 64GB. I could mostly live with that, even with using it as an iPod for a lot of losslessly-ripped music. But I got the 128GB iPhone 6s, because the price difference was basically a latte a month (around $4).

The model has some interesting implications, not least of which the shifting of the accounting for Apple to a recurring revenue model (more predictable), the likely change in Apple’s device mix to higher end devices, an improved customer service model (imagine how much happier Apple’s customers would be if all of them had AppleCare!), and more.

But for now, I’m just excited for a new device. W00t!

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