Don't Plan on Upgrading Your New Verizon iPhone Anytime Soon

No. 1 domestic wireless carrier Verizon  (NYSE: VZ  ) Wireless recently announced it was tightening upgrade policies, extending the time frame that consumers have to wait to a full 24 months. Carriers have also been trying to reduce subsidies via platform competition. That's an incremental negative for Apple  (NASDAQ: AAPL  ) , since the company still relies heavily on subsidies to boost iPhone prices, but not as bad as if AT&T  (NYSE: T  ) had made the move (it sells more iPhones).

In the video below, Fool contributor Evan Niu, CFA, explains how this might affect Apple investors.

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  • Report this Comment On April 17, 2013, at 8:15 AM, Jjkiam wrote:

    Funny I wasn't aware of the 20 month policy. I always thought it was 2 years. This is no more of a problem for Apple than any other smartphone provider. The idea that the carriers will end the subsidy might be the best thing for Apple. If Apple were to start offering the same low down payment low/no interest financing as they do in India similar Tmobile's new plan ; that would be a great game changer and major threat to the carriers duopoly. The lie is that the subsidies cost the carriers money when the opposite is true. Locking customers into 2 year contracts wouldn't be possible absent the subsidy. They make ridiculous exorbitant profits on These contracts and pay off the subsidy within a few months. Go Tmobile and the end of subsidies!!! Apple should take this bold step and follow Tmobile

  • Report this Comment On April 17, 2013, at 8:40 AM, tizhim wrote:

    Actually, the 20 month program is more detrimental to the carrier than the phone manufacturers. That is when you get these upgrade eligibility notices from them. The idea is to hook you into another 24 month contract with them BEFORE you are free at 24 months to consider the competition. T-moble at least has one thing right, separating the phone from the monthly service charge, While I see the necessity of unlocked phones - particurally if live in one are 6 mo and another (or travel frequently internationally), I never have understood having to pay the same full boat for the monthly service charge that includes everyone elses subsidized payback.

  • Report this Comment On April 17, 2013, at 9:06 AM, mmpizzachick wrote:

    Verizon has gone off the deep end with its prices. I have been with them for many years..started only because they were the only carrier that provided service in my area at the time. I have since lost my unlimited data, and am charged $20 more for the 2GB I do get. Just waiting until everyone on the plan is up for renew and switching to someone else.

  • Report this Comment On April 17, 2013, at 9:08 AM, GrimCW wrote:

    So this is a spoof site like the onion i take it?

    hope so with bogus talk of killing PC's...

  • Report this Comment On April 17, 2013, at 10:07 AM, maximus77 wrote:

    I wasn't aware that unlimited data wasn't available anymore until I tried to upgrade my phone. Verizon now wants to charge me $20 more for less data. I've been a customer since 99. They definitely do not appreciate loyal customers. Therefore, I will be switching to Tmobile, since they seem to have their prices somewhat more reasonable.

  • Report this Comment On April 17, 2013, at 10:30 AM, liegemaximo wrote:

    I was with Verizon for 10 years. I got tired of being ripped off. I'm on Walmart Family Mobile now (runs on T-Mobile towers) and couldn't be happier.

    I'm paying way less now for a lot more service. When me and my family were on Verizon, on a limited minutes plan with no data at all, it cost me $160 per month. Now I have unlimited data, unlimited minutes, unlimited txt, paying $140. The same service on Verizon would cost me over $200.

    Plus now I don't have a contract and can leave anytime I want. Screw iphones, screw Verizon, screw corporate rip offs. As soon as I find something better and cheaper than Walmart Family Mobile, I'll be moving over there.

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