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Won't offer long-running incentives in preparation for iPhone 4

Now that Verizon has the upcoming iPhone 4 to tout, along with the next wave of top-tier Android phones and first LTE-enabled 4G devices, the company has done away with a perk that could have helped some customers pay for said devices. Verizon has confirmed (via SmartMoney) that as of Sunday, January 16, its New Every Two and early upgrade policy will no longer be available to new customers.

The New Every Two program offered customers $30 to $100 toward the purchase of a new phone every two years. Current customers will be able to use this discount one more time within 6 months of reaching 20 months into their contracts. New customers will not be offered the perk.

Verizon's early upgrade program -- perhaps even more attractive than New Every Two -- offered “new-customer” pricing on devices 13 months into their contract. Customers will now have to wait a full 20 months before they are offered the upgrade price.

"The longer you can get customers to go between upgrading their phones, the stronger the profitability for the carrier," Michael Hodel, an analyst for Morningstar, told SmartMoney. As evidence, Hodel points to last year's iPhone 4 release, when AT&T allowed many subscribers to upgrade early, sometimes even waiving the $18 fee. This resulted in shrinking profit margins for the carrier. 

Verizon, on the other hand, can count on a number of AT&T iPhone users to jump ship for its CDMA version of the device -- without having to offer much extra incentive.



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Off topic
By The Raven on 1/18/2011 10:26:43 AM , Rating: 2
I know this is off topic, but I have to just say that I hate the way these companies push new phones. It is practically a vertical monopoly where they sell the phone and the service. I know this was a necessity in the early days of cellular tech, but I think we can take the training wheels off now.

Though it technically is not a vertical monopoly since the manufacturers of the phones sell to all service providers (except Apple).

I don't think any law is needed, but I wish people would wake up and smell what they are cooking. They are getting you to buy a new phone (without a real discount because you are locked into a contract). So why upgrade (for the average user)? They make it look like a good idea but in reality they are probably passing on the interest to us in the form of out monthly bills.

I'm just rambling a bit, but I just don't see why we need the service providers to push phones to us. I have yet to get a new phone because of this. And not to make anyone else feel guilty, but FOR ME a new phone is just one more piece of ewaste that I don't need.

Am I right? Or am I crazy? I don't know all the ins and outs of the cell phone industry so I wouldn't doubt that I am off target here.




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