Kevin Bostic
iPhone-owning Verizon customers may have to wait a little bit longer before upgrading to the next iteration of Apple's smartphone, as the nation's largest carrier announced on Friday that it was extending the wait period on device upgrades to a full two years.
"In alignment with the terms of the contract, customers on a two-year agreement will be eligible for an upgrade at 24 months vs. today's early upgrade eligibility at 20 months," the carrier said Friday in a post (via The Verge) to Verizon Wireless' News Center. Customers with contracts expiring in January of 2014 will be the first to be affected by the policy change.
Verizon's Friday announcement also tipped the full end of the carrier's New Every Two program, which granted customers a $30 or $50 credit toward a new phone depending on their monthly access tier. The program ended in January of 2011, but Verizon allowed customers to use their expired credits. As of April 15, the carrier will no longer honor those credits.
Verizon also says that customers can continue to share upgrades on accounts, so long as those upgrades are within the same device category: feature phones can be upgraded to smartphones, and tablets can be upgraded to newer tablets, but a smartphone's upgrade cannot, for example, be used for a new tablet.
Given the increasing complexity and expense of the mobile devices customers carry, the upgrade cycle is something of a double-edged sword for wireless carriers. In order to attract consumers to their networks, they must carry the latest devices. Consumers, though, typically are not interested in paying the full cost for these devices up front. The carriers, therefore, subsidize the devices, making the money back over the length of a contract and holding out cheaper upgrades in the future to entice customers into staying with them.
Verizon's Friday announcement gave no reason for the extension of the upgrade wait period. The carrier, which sold 6.2 million iPhones in the fourth quarter, has seen record smartphone adoption numbers. The carrier also saw five million new subscribers over the course of 2012.
In the same quarter, though, pension liabilities and expenditures stemming from Hurricane Sandy pushed Verizon to a quarterly loss of $1.48 per share.
Verizon competitors AT&T and Sprint appear, for now, to be holding to the 20-month upgrade schedule.
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49 Comments
Not really a big deal in my opinion. Its not like your phone dies or something. Whats another 4 months.
They gave no reason? I'll give you a reason: Their service blows. The towers decimate the phone's batteries when you're on the Internet, the call quality is junk, and now there is more competition than ever. That is all.
Their benefit was to lock a customer into a new phone before they could switch to a new carrier without an ETF fee. If they move it to 24 months they lose that leverage but that's at least 4 months more of service. Surely the bean counters have looked at who, why and when people switch carriers, as well as what they think they will gain in profits by keeping people another 4 months even if they do lose some immediately thereafter.
Verizon competitors AT&T and Sprint appear, for now, to be holding to the 20-month upgrade schedule.
Someone forgot to send out their collusion memo.
[quote name="Shogun" url="/t/156945/verizon-bumps-smartphone-subsidy-upgrade-wait-time-to-full-24-months#post_2309722"]They gave no reason? I'll give you a reason: Their service blows. The towers decimate the phone's batteries when you're on the Internet, the call quality is junk, and now there is more competition than ever. That is all.[/quote] It's because they are largest US carrier and they do a large committed following that they can offer this without back lash. If there service really did blow they would instead be forced to attract more customers through incentives. When you see a [I]centive[/I] it's because the company has the control position.