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Upgrading Your iPhone

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Jason R. Rich discusses several of your options when it comes to upgrading your current iPhone to the iPhone 6 or iPhone 6 Plus, or switching from another smartphone to one of the newly released iPhone models. As you’ll discover, not all cellular service providers require a two-year contract, or make you wait until your existing contract expires before you can upgrade.
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For some people, September through December is a time to enjoy the changing of the seasons, while for those who are tech-savvy, it’s become “upgrade season,” as this is when Apple releases new iPhone and iPad models. This year has been no exception. When Apple began shipping the iPhone 6 and iPhone 6 Plus, the company broke all previous sales records by selling more than 10 million of its new smartphone devices in just three days.

If you’re one of those people still yearning to get your hands on an iPhone 6 or iPhone 6 Plus, you fall into one of the following five categories, and how you proceed will depend on how much money you’re willing to spend.

Regardless of your situation, how much you’ll pay for an iPhone 6 or iPhone 6 Plus will depend on whether you qualify for subsidized or unsubsidized pricing. Subsidized pricing typically requires starting a new two-year service contract with a cellular service provider, but as you’ll discover, in some cases, alternate options exist.

Table 1 shows the current subsidized and unsubsidized pricing for the iPhone 6 and iPhone 6 Plus.

Table 1: Subsidized versus Unsubsidized Pricing for the iPhone 6 and iPhone 6 Plus

iPhone Model

16GB Capacity

64GB Capacity

128GB Capacity

Subsidized iPhone 6




Unsubsidized iPhone 6




Subsidized iPhone 6 Plus




Unsubsidized iPhone 6 Plus




You’re Acquiring a New iPhone with a New Service Contract

For those with no current contract with a cellular service provider, you can walk into any cellular phone store, Apple Store, or go to Apple.com, and obtain a new iPhone 6 or iPhone 6 Plus at the subsidized price, providing you are willing to sign a two-year service agreement with a cellular service provider.

In the United States, AT&T Wireless, Verizon Wireless and Sprint all support the new iPhone models, and each has a variety of service plans you can sign up for. AT&T Wireless has plans ranging from $60.00 to $415.00 per month. Verizon Wireless has plans ranging from $55.00 to $415.00 per month, while Sprint’s plans range from $70.00 to $110.00 per month.

The service plans offered by AT&T Wireless and Verizon Wireless each have a voice, data, and texting component, while Sprint offers all-inclusive and unlimited service plans. Keep in mind, the phrase “unlimited data” is used loosely by most cellular service providers. This typically means that each month, you’re given an allocation of 500MB, 1GB, or 2GB of 4G LTE wireless data usage, after which your account gets throttled to much slower 3G wireless data service.

As you’re choosing your cellular service plan, pay close attention to what is included with the wireless data component of the plan you sign up for. Also, focus on the coverage area offered by the cellular service provider, and make sure you’ll have strong coverage in the areas where you’re most apt to be using your phone.

Finally, be forward thinking. The iPhone 6 and iPhone 6 Plus support Wi-Fi Calling, which is a new feature that will be made available by several major wireless service providers within the U.S. starting in 2015. (T-Mobile is the only U.S.-based cellular service provider currently offering Wi-Fi Calling.) This feature allows your iPhone to switch seamlessly between a cellular and Wi-Fi network during phone calls in order to achieve the clearest calls with the strongest possible connection and signal.

So, if you’re choosing a new service provider that you’ll be contractually committed to for the next two years, select one that supports (or will soon support) the features and functions that are built into your smartphone. This also includes features like the ability of your iPhone to create a Personal Hotspot that can be used by your other computers and Wi-Fi compatible mobile devices. This is a feature some cellular service providers charge extra for or don’t offer at all.

You’re Looking to Upgrade Your Current Smartphone, and Your Current Two-Year Cellular Service Agreement Has Expired

To determine your eligibility to upgrade your current smartphone to an iPhone 6 or iPhone 6 Plus, visit the Apple website (http://store.apple.com/us/buy-iphone/iphone6),and click on the Check Your Upgrade Eligibility option.

If your current two-year contract has expired, you will be eligible for unsubsidized pricing when upgrading to a new iPhone, assuming you’re willing to sign a new two year service agreement. At this time, you can either keep your existing phone number and cellular service plan, or switch to a plan that better meets your needs and budget.

You’re Currently in the Middle of a Two-Year Service Agreement, and Not Eligible to Upgrade

Depending on your cellular service provider, if you’re in the middle of a two-year service contract, you may still be able to upgrade to a new iPhone right away. However, how much you’ll pay for the new phone will be somewhere between the subsidized and unsubsidized price, based upon how far along in your service contract you are.

AT&T Wireless, for example, has introduced a feature called AT&T Next. If you’re willing to pay a monthly fee, in addition to your monthly service fee, you can upgrade to a new smartphone every 12 or 18 months, starting immediately, instead of waiting for two years. If you select the Next 12 plan, the unsubsidized price of the iPhone 6 or iPhone 6 Plus is divided into 20 monthly installments, however, after 12 months, you can trade in your smartphone for the latest model.

Meanwhile the Next 18 plan divides the unsubsidized price of a new iPhone into 24 monthly installments, but allows you to trade in your smartphone and upgrade to a new model after 18 months. With either of these plans, if you ultimately make all monthly payments on the phone and hold off on your next upgrade, you wind up owning it after 20 or 24 months, and will not need to trade it in to upgrade after that time.

The benefit to the AT&T Next plan is that the only upfront cost to upgrade right away is the sales tax on the new phone. There is no activation fee, upgrade fee, or financing fee, and you do not have to pay even the subsidized price for the phone upfront.

Other popular cellular service providers have begun offering similar plans for people who want to upgrade their iPhone every year when the new model is released, but who don’t want to pay the unsubsidized price for the phone upfront (starting at $649.00) each year.

If a plan like AT&T Next is not offered by your cellular service provider, purchasing one of the new iPhones at the unsubsidized is always an option. In this case, you may be charged a one-time upgrade and/or activation fee by your cellular service provider, above and beyond what you actually pay for the phone.

You’re Willing to Change Cellular Service Providers to Obtain a New iPhone Right Away

Now that several cellular service providers in the U.S. are actively supporting the new iPhones, there is strong competition between these services. As a result, if you’re in the middle of a two-year service contract with one service provider, but you want to upgrade to a new iPhone, and you’re willing to switch to a different cellular service provider and begin a new two-year service contract, this can be an option.

In some cases, when you do this, the new cellular service provider will pay the early-termination fee associated with breaking your existing two-year service agreement (which can be upwards of $350.) While you can keep your existing phone number, you will need to choose a new service plan with a new service provider, plus trade in your current smartphone as part of the deal.

You’re Prepared to Purchase an Unsubsidized iPhone at Full Price

To avoid having to step into a two year service agreement with any cellular service provider, or if you’re in the middle of a two year agreement and don’t want to switch providers and potentially pay an early termination fee, you always have the option to purchase one of the new iPhones at its full, unsubsidized price, and then sign up for a month-to-month (prepaid) plan with the cellular service provider of your choice.

T-Mobile, for example, requires customers to acquire their smartphone at the unsubsidized price, and then offers competitively priced month-to-month service plans that can be ended by the customer at anytime. If you purchase an unlocked iPhone, in addition to AT&T Wireless, Verizon Wireless and Sprint, several other cellular service providers in the U.S. offer similar pay-as-you-go (also referred to as pre-paid or month-to-month) options, including:

If you go with this type of month-to-month option, keep in mind the plans are often much cheaper than what’s offered when you sign up for a two year contract. An all-inclusive plan starts at between $40.00 and $55.00 per month, but 1GB or less of wireless data is included. In addition, the coverage map offered by each service often has more “gaps,” and the customer service these lesser known providers offer is typically minimal at best.

When you purchased an unsubsidized iPhone, you own it outright. Be sure to purchase an unlocked version of the phone, and choose one of the GSM-compatible models that is most widely supported. This allows you to simply insert a micro-SIM chip from the service provider you choose, and pay a monthly fee for the service, virtually anywhere in the world. If you acquire a CDMA-compatible phone, this technology is supported by far fewer cellular service providers in the U.S. and around the world.

Final Thoughts…

There are many reasons to upgrade to an iPhone 6 or iPhone 6 Plus. In addition to being able to take full advantage of the iOS 8 operating system and the new features and functions it offers, only the newest iPhone models are compatible with the new Apple Pay service, which allows you to securely use your smartphone to make in-store or online purchases at more than 200,000 retailers nationwide.

The new iPhones are also faster, and offer enhanced technology that allows you to take, edit, and share higher-quality photos, plus play more visually stunning games that react faster to your actions. The new iPhones also allow you to surf the web faster and more efficiently, and offer larger size Retina HD Multi-Touch screens than previous generation iPhone models.

Regardless of which option you use to upgrade to a new iPhone, seriously consider also investing in a durable case for the smartphone, and also purchasing AppleCare+ ($99.00). Not only does AppleCare+ provide two years worth of technical support, it also covers most repairs, or even the replacement of the device if necessary. AppleCare+ does not, however, cover theft or loss of the smartphone. For this type of coverage, you’ll need third-party insurance, from a company like Worth Ave. Group (www.worthavegroup.com) or SquareTrade (www.squaretrade.com).

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