First AT&T stopped offering unlimited data plans, then Verizon Wireless followed allowing those to keep their unlimited data as long as they bought their own phone at full price. AT&T recently launched the Value Share Plans in which monthly service is discounted when you bring your own phone or pay full price.
When AT&T grandfathered unlimited data plans users could still get a subsidized iPhone or smartphone when they renewed their contracts. Watch out iPhone fans because AT&T may be decreasing or ending subsidies soon....
Full price for a new iPhone 5S is $649.99, more than some people's rents. Even though AT&T has great profits its CEO Randall Stephenson recently noted the market is saturated and the reason for subsidies, getting customers to drive more network usage is dead. He said that "---as you approach 90% penetration, you move into maintenance mode. That means more device upgrades. And the model has to change. You can't afford to subsidize devices like that."
We've been noticing this trend for a while, T-Mobile charges full price for its smartphones and you pay for the phone through a payment plan or up front. When the CEO of AT&T says things like this watch out. It's a warning that sometime in the future AT&T will end smartphone subsidies, if AT&T does it, then Verizon Wireless and Sprint will follow.
Other indicators that subsidies will end is the launch of the Moto G from Motorola a somewhat decent smartphone for $179.99 without contract that watch launched in November. Google has been dealing with the carriers for years and may information, we don't have yet.
The Moto G is also the one of the first "cheaper" smartphones that will eventually work with Verizon Wireless prepaid options. The only problem with the Moto G is that it does not support the fastest speeds of LTE, it only supports 3G and HSPA+.
Geez even QVC lets Tracfone buyers cut up the price of the phone with a payment plan.
It is also the first holiday season where we have reductions of prices of iPhone 5S/5c not on Black Friday through gift cards such as the Green Monday $50 gift card from Best Buy.
The last most recent quarters, T-Mobile added 2.1 million new customers. T-Mobile also increased its footprint for LTE and started offering free international data roaming to 100 countries in October.
Yes, T-Mobile the same company that AT&T could not buy is sending shock wave through the wireless world.
The high saturation of smartphone users does not necessarily mean that you absolutely must have an iPhone or smartphone. It all depends on what you need and how often you need it. We personally know people who refuse to take out their flip phones in a crowd of young people for fear of be ridiculed.
Before the carriers end subsidies, you will most likely be given some kind of notice, that would be the best time to upgrade before you have to pay the subsidy yourself.
Despite huge profits Verizon Wireless does not pay corporate taxes. In 2011, AT&T received a $420 million refund. If the carriers can get away without paying subsidies, they will.
Much of the price of an iPhone 5S/5c is to pay Apple a very profitable company.