Anyone who decides to buy the latest iPhone face the same dilemma: Do I buy from Apple or from my wireless carrier?
Buying directly from Apple typically means either a big one-time payment or joining the company’s iPhone Upgrade Program. That program, introduced in 2015 alongside the iPhone 6S and iPhone 6S Plus, splits the cost of your phone into 24 interest-free monthly installments, allows you to trade in the phone after the first 12 payments for the latest model, and includes AppleCare+ insurance.
It’s that last bit that elevates the cost of the program above most carrier payment plans. Carriers offer their own insurance, of course (at varying prices), but some people may want to buy their phone from Apple, just without the added $129 cost of AppleCare+.
That’s probably why Apple is now offering another option for buyers: “Apple iPhone Payments,” which is basically the iPhone Upgrade Program without the upgrades — or AppleCare+. Other than those omissions, it’s basically the same idea as the iUP, and even uses the same bank, Citzens Bank, to manage the installment loans.
The new plan removes the sticker shock of the relatively pricey Upgrade Program and gives customers a way to buy their phone from Apple by way of monthly payment that doesn’t go through the carriers. However, you will need to buy a phone with wireless service to get the option — Apple doesn’t offer it for unlocked phones.
It’s telling that Apple didn’t make even the slightest bit of fanfare about this new payment plan, and it even tries to hide it under a “Show more payment options” that you need to click before seeing it — even though Apple iPhone Payments is the only extra option. Apple’s carrier partners can’t be too thrilled with this new offering (although those plans typically offer an upgrade option Apple’s plan lacks).
Without AppleCare+, customers will only have 90-day phone support and a 1-year warranty on defects (both last two years under AppleCare+), but mostly they give up the two-time option of getting your phone replaced for only $99 in the event of serious damage. Lots of people are willing to live dangerously to save a few bucks.
And without the option to upgrade, are you really giving up that much? Put yourself in the mind of someone who may have bought into the iPhone Upgrade Program with the launch of the iPhone 7 last year (it’s not hard for me since I’m one of those people). Now that upgrade season is here, those customers have a choice that might inspire buyer’s remorse: Upgrade to the underwhelmingly incremental iPhone 8, or hold out for the ultra-high-end iPhone X and resign yourself to paying even more to Apple every month.
In other words, there’s definitely a customer for this new payment plan. If don’t think you’ll upgrade your phone more often than every two years, are willing to forego insurance to save money, and really hate your wireless carrier, Apple iPhone Payments is for you.