The iPhone landing on Verizon was certainly big news, ending AT&T's reign of exclusivity. On the flip side though, one tidbit got lost amongst the hoopla. Verizon officials have apparently decided to end the "New Every Two" program, which gives Verizon subscribers a credit ranging anywhere from $30-$100 for a new phone every two years. The change could make phones a wee bit more expensive for both current and future Verizon customers.
Verizon officials confirmed what SmartMoney had been told by Verizon sales reps at stores across the country. As of January 16, Verizon will no longer offer the credit to new customers and won't re-enroll current customers in the program after their next New Every Two upgrade. Verizon is also ending their early upgrade policy, according to store reps.
What's it all mean? More out-of-pocket costs for Verizon consumers. As an example with the perk, a longtime customer could have snagged the iPhone 4 for $99.99 - half of the original price of $199.99. Once the perk program ends, new subscribers would no longer be eligible for the discount. Current subscribers would lose the discount upon renewal of their contracts (unless, of course, one renews before January 16). Given though that iPhone 4 orders can't be placed until February, it would seem it'll be no dice here.
If that weren't enough, with the end of the early upgrade program, customers who could previously order discounted phones as quick as 13 months into a two-year contract, now have to hold off until 20 months in to get a new phone at the promotional new-customer price, instead of retail.
Analysts feel that Verizon's move is actually rather on solid footing. "The longer you can get customers to go between upgrading their phones, the stronger the profitability for the carrier," according to Michael Hodel, an equity analyst that covers Verizon for Morningstar. As an example, when AT&T allowed for users to upgrade early last year - including dropping its $18 processing fee - AT&T's profit margins saw a huge drop said Hodel.
In the long run though, despite the disappearance of the discount program, some analysts feel the grass could be greener for consumers. "The four national carriers are all fighting for the smartphone crowd in some way," notes Ken Dulaney, a Gartner Research analyst. While customers might see a drop in discounted upgrades, they could potentially see gains in various pricing plans or even, gasp, faster networks!
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(Image courtesy of smartphoneenvy.com)
