Mikey Campbell
According to multiple unconfirmed reports, AT&T is on the verge of making a major change to its smartphone sales model that will prohibit third-party retailers, like the Apple Store, from selling handsets under two-year contract terms.
Earlier this week, Droid-Life reported AT&T is planning to restrict local dealer and national retail locations from offering two-year contracts for smartphones, leaving only the AT&T Next installment program as a sales option. The change only applies to non-company stores, according to The Verge, as AT&T will continue to offer contract sales in its own stores and online.
An internal Walmart document viewed by FierceWireless purportedly confirms the plan, with the big-box retailer scheduled to stop on-contract AT&T smartphone sales on May 28.
Following up on the Apple angle, 9to5Mac on Thursday cited sources as saying the change in policy will indeed affect Apple Store options, meaning customers looking for an AT&T iPhone can sign up for an AT&T Next plan or pay full price. Apple added Next as a purchase option last August.
An AT&T spokesman declined to comment on the matter.
Unlike two-year contracts, which come with an up front fee for subsidized hardware, Next's installment program spreads the full unsubsidized cost over a term of 12, 18 or 24 months, at the end of which customers can trade in the device for a new one. Consumers get the benefit of not having a fixed service contract, but risk having to pay off the device cost in full if they leave prematurely.
AppleInsider Staff
Malcolm Owen
Oliver Haslam
Andrew O'Hara
Wesley Hilliard
William Gallagher
Christine McKee
75 Comments
The problem with this is AT&T never get enough models to sell. I tried buying through them on the first three iPhones. Waited in line for hours only to find out they only got two of the (first ever) 32GB or three of the (then) new white model, etc. it's only gotten worse over the years so I guess it's time to switch carriers. Hopefully the carriers will continue their "buy you out" of your contract offers after May 28th Anyone have recommendations on which carriers to switch to? I'd like to hear from people who were with ATT for years then switched to...??
So instead of competing, they just monopolize this for themselves. Sounds like AT&T's reaching for a page from it's old Ma Bell playbook.
Switched ATT to TMobile never looked back. ATT was arrogant and penny pinching for me and my pops. In Los Angeles TM coverage is good, customer service as weLl, though not had a reason to use it often. I don't know ATT"'s current policy, but TM only has surcharge until phone is paid off,, then it's only your plan. ATT and most other carriers kept the higher charge for ever. Maybe others have now stopped the. Inflated fee once the phone is paid off. They have forced change in other carriers.. Also went to Europe on a film shoot and called TM to unlock my phone, which they set up within five minutes or less.
This is the carriers trying to stop their inevitable relegation to dumb pipe status.
I'm thinking Apple should only sell 8gb iPhone 3G's to start AT&T stores. What's good for the goose......