Every major US carrier now has an early upgrade program. T-Mobile got the ball rolling with Jump, followed by AT&T Next, Verizon Edge and Sprint One Up.
Each is nuanced in its own wireless-provider way, and here we endeavor to lay out everything you need to know about AT&T Next.
AT&T Next has some good, and it has some ugly. The payment structure may infuriate some while the allure of the having a new device in hand every year will entice others.
Read on to get the Next lowdown.
What is AT&T Next?
Next is AT&T's early upgrade program. It lets customers purchase newer smartphones and tablets without having to wait until they're eligible for an upgrade or having to pay an early upgrade fee (ETF).
It was announced mere days after T-Mobile unveiled its early upgrade program, called Jump. Next went into effect July 26.
Next lets customers purchase a smartphone or tablet over the course of 20 months by paying monthly installments that roughly add up to the value of the device. However after 12 months, a Next customer can trade in their device for a new, eligible device. Monthly installments for the old device are waived and a new set of payments start over for the next phone or tablet.
How does Next work?
Next customers must agree to a 20-month, 0% APR installment agreement as well as a wireless agreement, which means voice/data since it Next covers smartphones and tablets.
At sign up, a Next customer can buy a new device without having to pay activation fee or the $36 upgrade fee associated a standard upgrade. There's no financing fee either, and Next participants are only on the hook for taxes upfront.
A call to an AT&T store revealed that for an iPhone 5S, a customer who signs up for Next can expect to walk out of the store after paying $60 in tax for a 16GB phone. Under a standard agreement, a customer would have to pay about $260 (subsidized cost, etc.) in-store for the same device.
A retail source of ours explained that if you sign up for a new phone at an authorized AT&T retailer (essentially a franchise store), your new phone will be mailed to you, a process that can take anywhere from 24 hours to three to five business days. AT&T wants to keep its inventory secure, which is why it won't let you walk out with a phone or tablet after only paying tax.
Our source said that if you buy your Next phone at a corporate store, you can leave with with phone in hand.
With the new phone, a monthly installment fee is attached to a customer's regular bill. AT&T has a full run down of monthly installment prices for smartphones here and tablets here. However, for example, an iPhone 5C would cost $22/month, a Galaxy Note 3 $14/month, an iPad Air $31.50/month and a Galaxy Note 8.0 $25/month.
After 12 months, a customer can opt to upgrade their device. But for the early upgrade to work, AT&T requires a trade-in with the customer's current phone or tablet in "good and functional condition." Accounts must be in good standing, i.e. you've consistently paid your monthly bills on time and aren't in the hole.
AT&T Next also offers the option to keep a phone after all of 20 monthly installments have been paid. The phone belongs to the customer, though they'll still have to pay for a service agreement.
If someone wants to jump the Next ship and cancel, they are required to pay off the device per the 20-month agreement. Once the device is paid off, the phone belongs to the customer.
Your wireless bill stays the same, subsidy included
While you're paying relatively inexpensive monthly installments for your device, you're still responsible for your wireless bill. Current customers will find their wireless bill stays the same when they sign up for Next - only the device's monthly installments are added on top.
Under normal, non-Next circumstances, customers (at most carriers, not just AT&T) buy a phone at a subsidized price, or a price that's significantly lower than the face value of the phone. An unsubsidized, unlocked 64GB iPhone 5S, for example, would cost $849 to purchase outright.
Additionally, if you get a phone on a 24-month contract but don't want to keep it after six months, you can pay an early termination fee (a smartphone "that requires a data plan with a service commitment" has a $325 ETF minus $10 for each month paid of the agreement) and the phone is yours to do with what you please. With a tablet, one purchased with a service agreement on or after November 9, 2012 has a $150 ETF minus $4 for every month completed of the agreement.
But back to subsidies, a 64GB iPhone 5S purchased on contract at AT&T costs $399. AT&T makes up for the cost lost here by including a subsidy in a customer's monthly service bill, which most estimates place at around $20 (AT&T has been reticent to disclose this figure).
At the end of an agreement or after paying an ETF, the phone belongs to the owner. They get to keep the phone.
Because the service bill price doesn't change with Next, customers are still paying a subsidy on top of their wireless payment on top of their monthly installment. In order to get an upgrade after 12 months, they have to trade in their phone (or tablet, whatever the case may be). So unlike a device purchased at a subsidized price, customers don't get to keep their Next device.
How is it different from AT&T's standard upgrade programs?
With a standard plan, customers become eligible for an upgrade after 24 months. AT&T used to offer upgrades after 20 months, but in June extended the wait time for customers whose contracts expire during or after March 2014.
Upgradeable devices are offered at a subsidized price, and customers can purchase the device at that price along with a new two-year agreement.
Those looking to upgrade can also share an upgrade with someone else on their account. They must be upgrading within the same device category (no tablet for a phone, and vice versa). AT&T doesn't allow cross-product category upgrades with Next, either.
Should you become sick of your device and want to upgrade early, you can do so after six months on your wireless agreement. AT&T will give qualifying customers a partial discount off the full retail price of their phone, but they have to sign up for a new two-year agreement.
The main difference between AT&T's standards upgrades and Next is that customers don't have to wait two years for to upgrade or for some other circumstances to fall into place.
Who can use AT&T Next?
Next is available to both new and existing AT&T customers with qualifying credit.
The service is currently only available for personal lines.
What devices can I get with Next?
At the time of this writing, AT&T listed 26 smartphones as eligible for Next. With monthly installment prices, they are:
AT&T's nine eligible tablets, with monthly pricing, are:
With devices that AT&T carries in different storage configurations, the monthly price generally goes up. The iPad mini Wi-Fi plus Cellular 16GB may cost $21.50/month, but the 32GB is $26.50/month and the 64GB costs $31.50/month. The iPhone 5S goes from $27/month for 16GB to $37/month for 64GB.
AT&T warns that for returned devices, a $35 restocking fee may be charged for smartphones or 10% of the tablet price.
The bottom line
Clearly there are some trade-offs with AT&T Next. For the privilege of an early upgrade, customers essentially double pay for a device they don't get to keep.
The out-of-store cost of a Next is cheaper, and the monthly payments may make financial sense for some, but the only way to keep the device is to pay off its full price.
When it comes to deciding whether to join up with Next, it boils down to personal preference. Is grabbing early access to a new device you may not keep incentive enough to swallow more in the long term? Or would you rather stick with a two-year agreement and wait out your upgrade or pay an ETF to get a newer phone or tablet?
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