Mobile Phone Subsidies


The new version of Apple’s iPhone has surfaced this week at the Worldwide Developers Conference, and users across the country are excited about getting their hands on the latest upgrade. As we all lead an increasingly mobile lifestyle, the all in one device comes with the ease of being able to work and stay in touch no matter where in the world we may be. However, for many people who upgraded to the latest iPhone version last summer, they may be left out in the cold with higher upgrade prices. The mobile phone companies have made subsidizing phones common practice, and you have to be within a certain portion of your contract to qualify. lays out a handy explanation and charts on mobile phone subsidies on a whole:

Generally, for a two-year contract, U.S. carriers will give you a fixed subsidy per year. In the case of the iPhone and other smartphones with data plans, that subsidy is $200 per year. You sign up for two years, they give you a $400 subsidy. You try to re-up a year early, you only get a $200 subsidy. Seems fair enough to me, but why settle for fair?

As is being widely reported, AT&T lets you have the full $400 subsidy if you re-up after 18 months, giving you a six month re-up period ahead of your contract expiration. Pretty standard, though not explicit, practice among U.S. carriers.

The charts on the site will give you a great view on just how the subsidies work and where your money goes.