many of you have been asking me to explain these new early upgrade programs.
and naturally i'm glad to do so.
is this a scam?
the answer is No.....
before i do the math let me explain this.
in the world of technology....you get what you pay for! yes, there are great deals out there, and these deals either cost you at the beginning...or at the end...bottom line is...they cost.
if you want to have the ability to upgrade every year, you are going to have to pay for it. OR keep with your two-year contract like most others.
so if you want to floss like a baws (boss)...you gotta pay the cost!.....
word.....
yeah i could have been a rapper.....
so lets get right to the math
now these upgrade programs differ from carrier to carrier, along with the math. i'm just using examples, so please keep in mind that these aren't official prices!
I'm going to be using a Samsung Galaxy S4 as my example purchase on a early upgrade program with AT&T
- AT&T.
32 (example monthly cost) x 20 (months) = $540...Plus the cost of the phone service.
So the average monthly cost for AT&T phone service is about $110 before taxes for a single line...taxes run about or around $11 extra....so that's about $121 monthly.
in 20 months time the service is costing me about $2420.
now lets add the monthly installment for the phone itself which is $540.
it all equals $2960..
seems like a scam huh.
...Wait...
(and i made this mistake on PURPOSE)
..i thought with the early upgrade program, you get to upgrade every year instead of every 20 months!..
if you made that statement you are absolutely correct...
so lets redo this math...
32(monthly costs) x 12(months via annual upgrade program) = $384
and naturally the cost of the service itself remains the same only on a 12 month scale
$121 (monthly service cost for a single line) x 12 (months) = $1452
all equaling a grand total of $1836...
think its still a scam.....
yes or no?
i say no..again.....
and here is why.....
before these early upgrade programs existed....some companies like Verizon, for example, were allowing upgrades to take place for customers every 20 months, instead of every 24 months like the customers standard contract demanded, of course we all know when its time for your upgrade, you are allowed to purchase a new phone for a discounted price, and a 2 year extension to your contract. now what began to happen for Verizon, and what i think is the reason they stopped doing this, the company began to realize they were losing money.
think about it
(the following is an estimation!!)
now the cost of service was about $100 (after taxes).
now i want you to realize that paying for the service and paying for the phone is NOT the same...the service provider pays retail for phones from the manufacturer (most likely at a deal but that's besides the point lol ). so lets look at the math
ill use Verizon as an example...
- Verizon Pays Motorola $549 for a Droid phone
- Verizon sells the phone to me (on a new contract deal) for $149 (holiday sale)
with a bout a $110 monthly service plan, (with an option to upgrade in 20 months)
- 18 or 19 months i get an advertisement from Verizon, to upgrade my phone (at full discounted price) and extend my contract 2 more years (with the same option to upgrade again in 20 months)
lets work
- Verizon pays $549
- I Pay Verizon $149 + 110(monthly service) x 20(months)
what i paid for the phone = $149
what i paid for service in 18 months = $1980
now considering that Verizon payed Motorola full retail ($549 for just one phone)
lets take that away from what they received from me in services.....
1980-549=$1431
now i said Verizon was losing money....
think of it like this....would you rather make $1980 every two years (18-24 month scale) or..$1836 every 10 months. and that's just in services.
with the upgrade program Verizon has implemented they now make (off one person) about $2500 in 20 months in services PLUS the retail price of the phone....like a Galaxy Note 3 , which is about $750-$800, lets say $800 for a grand total of $3300..
the company makes more money....
the customer gets what they want, when they want it.....(annually of course)
Everyone wins..
Supposedly
but hey don't just take my word for it, feel free to do your own investigation, i cant turn up any scams, because i understand business, profit, and good ol' fashioned staying power.
maybe that's just me...
these have been your technological announcements for Monday October 28th, 2013
please govern yourselves accordingly.
remember i can always use suggestions and topics.
thanks for coming by and also remember to come back
Until Next Time....
AwkwardlyNormal