For a long time now when a user was ready for a new smartphone, AT&T would allow early upgrades for most users. The user would pay the normal upgrade price and then agree to a new contract and walk out with their new phone. This is how a lot of iPhone users upgraded to newer models.
AT&T has confirmed that it is upping the price of the iPhone 4, iPhone 3GS, Android, and Windows Phone offerings by $50 for all who upgrade early. AT&T is also upping the price of the devices for those that buy with shorter contracts by $150.
Impact on Early Adopters
AT&T wants to make clear that only early adopters and those with shorter contracts will pay extra. Users that upgrade at their normal time will still get the standard rate. If you needed a new smartphone and you are still under contract you should have bought last week. This change is significant for those who are always looking to have the latest technology as soon as it is available. Early adopters often value having the newest features and improvements, and this price increase could be seen as a deterrent for those who are not willing to wait until their contract ends.
Strategic Implications for AT&T
This move by AT&T can be seen as a strategic effort to manage their customer base and contract renewals more effectively. By increasing the cost for early upgrades and shorter contracts, AT&T is likely aiming to encourage customers to stick to their contract terms, thereby ensuring a more predictable revenue stream. This could also help in managing the supply chain and inventory more efficiently, as the demand for new devices would be more evenly spread out over time.
Moreover, this pricing strategy might push customers to consider alternative options such as leasing programs or installment plans, which have become increasingly popular. These plans allow users to pay for their devices over time without the need for a large upfront payment, making it easier to upgrade to new models without the financial burden of early upgrade fees.
Have a look at our article on the difference between the iPhone 4 and iPhone 4S, and also make sure you check out our iPhone 4S review.
Additionally, this change could influence the secondary market for smartphones. As the cost of upgrading early increases, more users might opt to sell their old devices privately to offset the cost of a new phone. This could lead to a more vibrant market for used smartphones, benefiting those who are looking for more affordable options.
In conclusion, while AT&T’s decision to increase early upgrade prices and fees for shorter contracts might be disappointing for some users, it is a calculated move that could have several long-term benefits for the company. It encourages customers to adhere to their contract terms, potentially smooths out demand for new devices, and might even stimulate the secondary market for smartphones. As always, users should carefully consider their options and timing when planning their next smartphone upgrade.
via BGR
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