TMo Upgrade Anytime?
There was some discussion shortly after T-Mobile’s uncarrier announcement about an upgrade anytime policy for customers willing to buy into a special program. The community treated this as more than the fancies of some hopeful customers because the CEO himself is the one who brought up the idea. Here’s the thing though, the only thing you are really paying for in a situation like this is convenience. In fact, with a buy in premium and something like a 2 upgrade max a year, T-Mobile would more than break even, they could make a fortune off us tech fiends who always want the latest and greatest.
Phones are Becoming Like Cars
Anyone ever checked out the phone insurance at Sam’s Club? The Best Buy Geek Squad Black Tie program? Both offer protection from damage and though they don’t cover lost or stolen, they come with additional perks like one time battery replacement. Most importantly, they come with conditions to buy back the phone. I’m not as familiar with the Best Buy program, but I do know the Sam’s policy is offered through SquareTrade, and comes with 50% guarantee for buy back within the first 6 months, 40% for months 6-12, 30% for months 12-18, and 20% for months 18-24.
The best part about the SquareTrade option is that you only have to purchase the policy within 30 days of the original purchase. You don’t even have to buy the phone from Sam’s Club. It’s also $100 and comes with a $50 deductible per incident. It’s cheaper than the Asurion plans offered through your carriers over the course of the contract and also cheaper if something goes wrong. Here’s the thing though, the buyback is a rip-off as long as you are willing to put in a little effort, at least if you have a flagship device.
When you purchase an OEMs flagship, there is a good chance they won’t put out a comparable model for another year. I know there are exceptions to this rule, and everyone on this site has one opinion or another or even another on HTC’s insanity, but we can hope they have learned from their mistakes and are moving towards the Apple/Samsung model. There’s probably a good chance with Google firmly in control of Motorola, they will also follow this model. They might not, but industry trends point to a yes when Google already likes to keep it’s Nexus relevant for right around a year.
As long as you attempt to sell that phone before the next model is out, there is a high probability you are going to get much more than 50%. The Galaxy S3 is still in the $400 on the DFW craigslist with some rare finds in the $250-$300. With the GS3 retailing for $600 or so, you can still sell it for 2/3 of the original price and with the SquareTrade plan, if you bought the GS3 at launch, you would only get around $240…clearly a loss compared to the craigslist market and you paid a $100 for the chance to sell it back so you really only got a buck forty, but there is the insurance that also comes with the policy so some people might find the peace of mind worth the premium.
Some T-Mobile Numbers
Below are a couple tables where I only consider T-Mobile getting offers as good as a consumer can get.
As you can see, T-Mobile would “lose money” if they let you upgrade 2 phones a year on most of their current phones, but would make money every time on their 1 phone a policy whether your buy in cost was $5, $7, $10 a month. Here’s the thing though, T-Mobile isn’t us. They are going to be able to get much better deals on current flagships with OEMs and then they are going to turn around and sell your returned handset at a discount with a refurbished label. That money that T-Mo is “losing,” and I use the term very, very lightly as we all know they aren’t going to lose a single cent, on the 2 upgrade a year plan will easily be made up in reduced refurbished phones that still allow them to make a profit on the handset a second time while also making a profit from the service they provide. Basically, it’s nothing short of bloody brilliant!
It’s also important to remember that the installments top out at $20 for 24 months. It’s may not be cheap for those on a tight budget, but it’s definitely not unreasonable. If you are someone who can easily double the installment for 12 months, you could upgrade your phone under T-Mobile’s installment plan once a year, and then turn around and sell your old handset for at least half, and more than likely more, meaning your next phone could receive a larger down payment and after only a year, you could upgrade anytime you wanted and still pay off the phone with a large enough profit to pay around 50-60% of the new phone. If you find something better after a few installment payments, you could easily sell your phone for its aftermarket value and still put down a significant amount on the next phone.
Believe me, T-Mobile’s upgrade anytime policy is coming, and though the more educated consumers aren’t likely to take the very enticing bait, many customers will, and T-Mobile is going to make a killing. They’ve already got Verizon’s attention with their new model, everyone is going to sit up and take notice when this thing takes off.
Latest posts by Robert Marez (see all)
- TMo Upgrade Anytime? – Friday, April 12, 2013
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- Project X; What’s Necessary and What Isn’t? – Thursday, February 7, 2013
- [Editorial] The Day I Got Fed Up With Verizon – Friday, February 1, 2013