The announcement of T-Mobile's Jump device upgrade program has made some waves in the wireless market. Now AT&T has launched Next, which promises to allow smartphone and tablet owners to get an annual upgrade. For the most part, iPhones are now subsidized by AT&T in exchange for a two-year contract.
The subscriber pays $200 up front for the 16 GB iPhone 5, contributing to the purchase price. When it's time to upgrade, the old device is owned by the customer and the process starts all over again. AT&T Next operates differently. Participants in the program will pay monthly installments to cover the cost of the phone. There is no down payment at the beginning of service.
Instead, AT&T will divide the price of the new iPhone into 20 equal payments. When it comes to the 16 GB iPhone 5, this totals $32.50 per month (the retail purchase price is $650). After 12 months goes by, the customer can choose a course of action. Upgrade with no additional fees (the $36 upgrade fee is now standard), trading in the existing phone and getting a new one. This means the subscriber no longer owes AT&T the remaining $260 on the old phone, since the device is traded in.
The alternative is to wait until the 20-month mark has passed, and the old iPhone is paid off completely. In this case, the iPhone is the property of the customer and they are eligible for an upgrade. Reports indicate that Verizon Wireless is working on a similar frequent upgrade plan for its customers dubbed VZ Edge. The Verizon program is slated to launch officially on August 25.