People don't give Verizon
The much-lauded iPhone 4 becomes available for new Verizon customers on Feb. 10, and a week before that for loyal upgraders already in the Verizon system. And there was much rejoicing. At the same time, Verizon's best discount program for upgrades is ending. Right now, longtime customers can receive an extra credit of $100 through Verizon’s "New Every Two" program. However, on Jan. 16, the program goes away. In addition, customers looking to upgrade phones early must now wait 20 months into a two-year contract to be eligible, whereas they previously had to wait only 13.
That way, nobody will be able to qualify for that upgrade program with an iPhone in their pocket. If you want an extra $100 off a phone, you have two days to buy some other Verizon-approved handset that could be sacrificed on the upgrade altar in 2012. Most people won't do this, letting Verizon off the hook for that extra subsidy. The ones who do go that extra mile are locked into a two-year Verizon contract.
Either way, Verizon wins.
Another tactic that would have worked would be to end the upgrade discounts a week or so after the iPhone hits pre-order shelves. A flood of customers would hurry to get their extra-subsidized iPhones before the opportunity ended, thereby juicing Verizon's launch numbers to ridiculous levels. That might have backfired later, when the iPhone 5 launch could look less impressive on Verizon than on AT&T
So Verizon opted for more money now with lower subsidy costs, rather than the other way around. No one ever accused telecom giants of being consumer-friendly, but they sure do treat their investors right.
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