iPhone prices to get a price cut from $32.50 to $27 per month
AT&T Next smartphone upgrade program has produced enormous amount of backlash and this is why AT&T has cut the prices on a number of different devices on the program including the iPhone. The price now is $27 per month and it is now a dollar cheaper than similar offer on Verizon for the 16GB version which was previously at $32.50 per month which was considerably more than the other similar programs from other companies.
However, through the new programs customers end up somewhat double paying for the device in question. The way the program works is that you pay new monthly device payments and the portion of the monthly service charge that has been used by the carrier to return some of the money used to provide the initial subsidy. If we dare to assume that $20 of AT&T monthly service fees go to recoup the subsidies that were upfront the client looking to upgrade after 12 months would have paid by then $324 in device payments on 16GB iPhone 5 and $240 from monthly service fees, yielding total payments of up to $564 for the $650 device and even more they have to turn in the device to AT&T.
Verizon’s Edge program seems to work in the same manner, and now officially, for a almost the same price tag. Separating the $650 iPhone cost over 24 months and monthly payments of just over $27, and in this way a client looking to upgrade after a year would have paid $325 in handset payments and $240 from monthly service fees, equaling in total payments of $565 and again the device should be traded-in.
For now this is what the Carriers offer when it comes to new devices probably we may expect price drops after the new devices are announced in September and after at the IFA and the Samsung and Apple events.
Source: Mac Rumors