Apple Inc. Unveils Plan to Lease New Unlocked iPhones w/ No Initial Payment - Telus, Rogers, Bell Canada Say No Thanks.

[TOMapleLaughs]

Canada's Mobile Oligopoly at Work

http://business.financialpost.com/fp-tech-desk/big-three-canadian-carriers-snub-apple-incs-new-monthly-instalment-plan?__lsa=b3e0-bc71

A week after Apple Inc. unveiled a program to allow customers of its retail stores in the United States to finance unlocked models of its two newest iPhones and upgrade annually, top executives at Canadas three largest carriers dismissed the plan in chorus, reiterating that the subsidy model they have in place works just fine.

Apples new pricing arrangement separates the cost of a handset from the price of cellular service. Based on equal payments over a 24-month period, an iPhone 6S and iPhone 6S Plus can be leased starting at US$32 and US$37 per month, respectively, and theres no initial down payment. Service will be a separate charge.

In Canada, however, the basic storage option for each device can be purchased for $398.99 and $528.99 on a two-year contract. Carriers then recover the balance of the $899 and $1,029 retail prices during the term.

While the leasing program can help Apple sell more of its flagship product, U.S. carriers will be on the defensive because they will have to do more to retain key clients. Hence, dont expect the largest carriers in Canada, which analysts say operates within an oligopoly, to import it or ask for a similar pricing model any time soon.

Why would we do it? We see it as cash-dilutive for us and, eventually, the industry if everybody does it, Anthony Staffieri, chief financial officer at Rogers Communications Inc., the countrys largest carrier, said Tuesday at an industry conference hosted by investment bank BMO Capital Markets in Toronto. We dont see a lot of upside. We see it as if the market moved that way, then wed look at it reactively.

The four U.S. carriers participating in Apples Upgrade Program AT&T Inc., Sprint Corp., T-Mobile US Inc. and Verizon Communications Inc. may lose a point of contact with subscribers, Maher Yaghi, an analyst at Desjardins Securities, said Friday in a note to clients. This, in turn, could encourage people to discontinue their contract with their provider, called churn, and opt to finance directly with Apple.

Were certainly not looking to lead at all on any kind of handset financing, John Gossling, chief financial officer at Telus Corp., told the conference. I see why a handset manufacturer might like it, especially when their product is pushing $1,000, but that doesnt mean its something we feel compelled to do. The subsidy model has worked very well for us.

Bell Mobility, for example, subsidizes phones between an average of $300 and $350, which sees customers paying $200 upfront, according to BCE Inc.s chief executive officer George Cope. The upfront cost of a new iPhone, however, is almost three times higher than Copes estimated average of $200.

What people are looking at is do you finance that $200 to make a person pay nothing upfront to drive it, Cope said during an interview session with BMO Capital Markets telecom analyst Tim Casey. Its not a program youre going to see. Youre not going to see it from Bell. I think its a very healthy market when people put money down to purchase the product, and if it changes, then well change with the market.

In the meantime, the carriers are preparing for the Sept. 25 launch of the new iPhones, a smartphone that historically has compelled devout Apple users to renew their plan or look elsewhere to get the latest phone. Will it be the disruptor that the double cohort, the wave of three- and two-year plans expired concurrently, was supposed to be, or will it be too pricey to catalyst meaningful attrition?

The double cohort is not nearly as disruptive as we were worried it could have been, said Staffieri, CFO at Rogers. Mind you, us and others have been doing a lot to inoculate our base against potential churn, but I would say that spending has been largely in check. Biggest driver is going to be the success that the (iPhone) 6s is going to have in the marketplace.

The reason for them not wanting to ditch the subsidy program is simple: An unlocked iPhone from Apple is cheaper than going on a 2-year term subsidy. Before, the initial cost was the problem, but if Apple is now leasing them? Viola! Cheaper iPhone payments for consumers.

Here's the comparison of contract vs. buying done on iPhone 5s

Whats a better deal? Get an iPhone on a 2-year term or buy an unlocked iPhone from Apple?

We get asked this all the time. Whats a better deal? Well it all depends on your needs. Lets try to compare an iPhone plan with 2GB of data on contract and off contract.

Scenario A: Buying an iPhone 5s on a 2-year contract

16GB iPhone 5s: $229.99

$85 plan with 2GB data x 24 months: $2040

Activation fees: Bell ($15, promo price); Rogers ($15)

Unlocking fee: Rogers ($50); Telus ($35); Bell ($50)

Total cost: $2334.99 + tax (iPhone, plan, $15 activation fee, $50 unlocking fee)

Scenario B: Buying an unlocked iPhone 5s from Apple and going month to month

16GB iPhone 5s: $719

Plan 1 $59 Fido Smart Plan with 2GB data x 24 months ($53.10/month after 10% BYOD discount): $1274.40

Plan 2 $49 Fido Smart Plan with 1GB data x 24 months ($44.10/month after 10% BYOD discount): $1058.40

Plan 3 $39 Fido Smart Plan with 400MB data x 24 months ($35.10/month after 10% BYOD discount): $842.40

For couples/families: add an additional line, save an additional 10% on top of 10% BYOD discount

Plan 1 total cost: $1993.40; potential savings vs 2 year contract > $341.59

Plan 2 total cost: $1774.40; potential savings vs 2 year contract > $560.59

Plan 3 total cost: $1561.40; potential savings vs 2 year contract > $773.59

http://www.iphoneincanada.ca/carriers/unlocked-iphone-vs-2-year-term/

We're essentially being screwed. Buuuuut it's been great for profits.

Rogers, Bell, Telus: The most profitable cellphones around

Exactly how profitable are Canada's cellphone carriers? The short answer: very. The longer answer: They are the most profitable in the developed world.

The Canadian wireless market, of which more than 95 per cent belongs to Rogers Communications Inc., Bell Canada Inc. and Telus Corp., was the most profitable of 23 developed countries surveyed in a recent report by Merrill Lynch.

Rogers, Bell and Telus arrived at the high profit margins by bringing in correspondingly lofty revenue from customers. In the wireless industry's key measure of monthly average revenue per user, or ARPU, Canadian carriers came in not just second-highest among developed countries, but second-highest in the world.

http://www.cbc.ca/news/technology/rogers-bell-telus-the-most-profitable-cellphones-around-1.755793

"But they give Canadian jerbs, right?"

Well, when Horizon was looking into coming into Canada, the Oligopoly reacted:

Wireless incumbents recently launched a website titled Fair for Canada calling for change in Ottawas wireless policies as they will ultimately put Canadian jobs on the line. Full page ads, such as the one below, have hit newspapers along with various spots on local radio stations as well to garner public support.

Despite these ads, many have questioned how Rogers, TELUS and Bell can preach the potential loss of Canadian jobs when they themselves have outsourced local positions overseas. TELUS has a call centre in Manila, Philippines which employs 3,000 people; Rogers has outsourced IT services to IBM; Bell has outsourced jobs to India.

http://www.iphoneincanada.ca/carriers/ottawa-condemns-rogers-telus-and-bell-for-dishonest-lobbying/

Now, Manuel is a really nice mobile telemarketer and I enjoy talking to him now and then, but he's not Canadian. Fewer and fewer jobs supplied by these companies are going to Canadians. So wtf?

"But they pay their fair share of taxes in Canader, right?"

Canadian Corporations Had $200 Billion In World's Top Tax Havens Last Year: Report

Last year, Canadian corporations held $71 billion in assets in Barbados. They had another $36 billion in the Cayman Islands.

Is Canadas business elite anticipating a massive boom in beachfront hotels and little paper umbrellas for mixed drinks?

Not likely. More likely, theyre sheltering income earned in Canada from taxes at home. According to a recent estimate from Canadians for Tax Fairness, the amount of money Canadian corporations held in the world's top 10 tax havens jumped to $199 billion in 2014, from $187 billion a year earlier.

Most of that money is there to avoid paying taxes back home in Canada, says Dennis Howlett, the group's executive director.

Walk down a street in Cayman Islands and you will see very little evidence of $36 billion in Canadian investment. But what you will see are small buildings with hundreds of mail boxes that are head office to more than 18,000 shell companies most of them subsidiaries of corporations trying to avoid tax. The same scenario plays itself out in Luxembourg and other tax havens."

Luxembourg is one tax haven Canadian companies are bailing on; $5 billion in Canadian cash pulled out last year. The taxpayers' group thinks that may be partly because of last year's widely publicized leak of secret accounts held in the country.

Some of that money may be flowing instead to Switzerland, which has seen a tripling of Canadian corporate assets just since 2011, to $11 billion.

More than half of the money is channeled abroad by Canadian banks and financial institutions who play a key role in facilitating tax avoidance, the Taxpayers Federation says.

And that may just be the tip of the iceberg. The Taxpayers Federation's numbers are based on foreign investment data from StatsCan, and don't include money held by Canadians through foreign-owned companies and undeclared assets.

The group estimates that $199 billion in sheltered assets cost governments some $7.8 billion in lost revenue for 2014.

The group is among many others who are calling for the Canada Revenue Agency to officially calculate Canadas tax gap the amount of money Canadas governments are losing due to tax evasion.

While many countries, including the U.S. and U.K., have released official estimates of their tax gaps, the Canada Revenue Agency under the Harper government been accused of stonewalling on the issue.

The growing use of tax havens comes even as Canadas tax burden shifts steadily away from corporations and onto individuals. One economists analysis estimates that 2014 was the first year that more than half the governments revenue came from personal income taxes.

The federal corporate tax rate in Canada began falling at the turn of the century under the Liberal government of Jean Chretien, and has continued to fall under the Conservative government of Stephen Harper. It's down to 15 per cent today, from 28 per cent in 2000.

http://www.huffingtonpost.ca/2015/05/16/corporate-tax-havens-canada_n_7293410.html

(Hey, maybe some of that recent 'Surprise!' Government Surplus come from some foreign corporate bank account.)

Don't get me wrong.

Corporate profits for Canadian corporations are great.

But at what point do they, y'know, HELP ACTUAL CANADIANS!?!

[Shift-4]

I hate Telecom companies as much as anyone but I am not sure why you put that last story in there. It doesn't indicate that it is the big three telecom companies engaging in the tax sheltering. It is dishonest to assume some linkage there.

Edit: Telus as an example paid $464M in income taxes last year on $1,926 income. That is 24%. If they are tax sheltering in off shore accounts they really suck at it.

[Xbox]

What about Verizon, Sprint, AT&T and T-Mobile? I know the US has always been better when it comes to cell phones, but to what degree?

As for Canada, that only leaves Wind left. All the smaller brands are subsidiaries of the big 3

[Dedalus]

What about Verizon, Sprint, AT&T and T-Mobile? I know the US has always been better when it comes to cell phones, but to what degree?

What do you mean to what degree? I really didn't like Canada's cell phone companies/plans when I was there. I don't know what kind of plans they have now.

I'm with T-Mobile. This is my plan:

$75 USD for (copy-pasted from my Tmobile account):

Simple Choice North America Plan: Unlimited Talk + Text$50.00/mo

This plan includes:

Unlimited talk, text and data while on our network with no overages or annual service contracts.

NOW! Includes unlimited calling to any number in Mexico and Canada from the U.S. PLUS get 4G LTE data and unlimited calling and texting when you’re in Mexico and Canada, just like in the U.S., at no extra charge.

Starting with up to 1GB 4G LTE data per month. Your choice of additional 4G LTE data.

Unlimited data and texting when you travel to any of 120+ countries and destinations so you can stay connected when you’re abroad.

Music Freedom™ with unlimited music streaming on our network from top services such as Pandora and iHeart Radio without using your data.

Coverage not available in some areas.

5 GB High-Speed Data with Data Stash

$20.00

Up to 5 GB of 4G LTE data. Speeds reduced after 5 GB. No overage fees. Recommended for heavier music/video streaming or moderate downloading of large files or apps. Includes Data Stash, which rolls your unused 4G LTE data into the next month. (Data begins carrying over after limited-time free 10GB runs out.)

[Armada]

What do you mean to what degree? I really didn't like Canada's cell phone companies/plans when I was there. I don't know what kind of plans they have now.

I'm with T-Mobile. This is my plan:

$75 USD for (copy-pasted from my Tmobile account):

Simple Choice North America Plan: Unlimited Talk + Text$50.00/mo

This plan includes:

Unlimited talk, text and data while on our network with no overages or annual service contracts.

NOW! Includes unlimited calling to any number in Mexico and Canada from the U.S. PLUS get 4G LTE data and unlimited calling and texting when you’re in Mexico and Canada, just like in the U.S., at no extra charge.

Starting with up to 1GB 4G LTE data per month. Your choice of additional 4G LTE data.

Unlimited data and texting when you travel to any of 120+ countries and destinations so you can stay connected when you’re abroad.

Music Freedom™ with unlimited music streaming on our network from top services such as Pandora and iHeart Radio without using your data.

Coverage not available in some areas.

5 GB High-Speed Data with Data Stash

$20.00

Up to 5 GB of 4G LTE data. Speeds reduced after 5 GB. No overage fees. Recommended for heavier music/video streaming or moderate downloading of large files or apps. Includes Data Stash, which rolls your unused 4G LTE data into the next month. (Data begins carrying over after limited-time free 10GB runs out.)

[Mr. Ambien]

$92 CAD for the first 1GB...

$120 CAD after that..

Pretty sure you can get something as comparable here.

[-SN-]

Better for customers? Less money for carriers?

NOT IN OUR COUNTRY

[elvis15]

No one's being screwed. Everyone has the option to buy the phone outright - both from the provider and the manufacturer - and then put it on a plan separately. If a provider doesn't want to use a manufacturer's leasing model, then why is that such an issue?

By the way, I already knew what your opinion would be with your bolded 'headline' to start the OP that was not present anywhere in the article that followed it.

And the comparison article after that? If you go to that article they even show how plans start at $70-75 a month but only present the $85 monthly cost. That's like me saying my house would be cheaper if I didn't mortgage it but paid for it up front - especially if I compared the prices by using a mortgage that was the most expensive of the options available. Of course it would, but people want things they can't afford to pay for, and I need a house more than I need a phone so I finance my house and buy my phone outright based on what I can afford.

If you want to complain about profits, then I'm sure the 'big three' would be happy to complain about costs as well, particularly when they choose to reinvest profits into upgrading network technology and other areas of the business to make things better. This is especially ironic considering you've compared them to someone like Verizon (Horizon?!) in the states who didn't want to invest in any Canadian jobs or a network of their own, only to buy their way into the market. It's expensive keeping the quality of service up in a country as spread out as Canada considering there's less population to support those costs.

The last article doesn't even mention any of the cell companies. But hey, don't continue to show your bias or anything.

[TOMapleLaughs]

No one's being screwed. Everyone has the option to buy the phone outright - both from the provider and the manufacturer - and then put it on a plan separately. If a provider doesn't want to use a manufacturer's leasing model, then why is that such an issue?

By the way, I already knew what your opinion would be with your bolded 'headline' to start the OP that was not present anywhere in the article that followed it.

And the comparison article after that? If you go to that article they even show how plans start at $70-75 a month but only present the $85 monthly cost. That's like me saying my house would be cheaper if I didn't mortgage it but paid for it up front - especially if I compared the prices by using a mortgage that was the most expensive of the options available. Of course it would, but people want things they can't afford to pay for, and I need a house more than I need a phone so I finance my house and buy my phone outright based on what I can afford.

If you want to complain about profits, then I'm sure the 'big three' would be happy to complain about costs as well, particularly when they choose to reinvest profits into upgrading network technology and other areas of the business to make things better. This is especially ironic considering you've compared them to someone like Verizon (Horizon?!) in the states who didn't want to invest in any Canadian jobs or a network of their own, only to buy their way into the market. It's expensive keeping the quality of service up in a country as spread out as Canada considering there's less population to support those costs.

The last article doesn't even mention any of the cell companies. But hey, don't continue to show your bias or anything.

imho The last article doesn't even have to mention these companies, as they are among the most profitable in the country. Cheers.

[elvis15]

imho The last article doesn't even have to mention these companies, as they are among the most profitable in the country. Cheers.

Glad you could clear all those points up for me...

[TOMapleLaughs]

Glad you could clear all those points up for me...

Oh, I also already knew that you'd complain about my opinion?

Meanwhile, check out the sweet deals that their CEO's are getting:

Among the Top 100 paid CEO's in Canada:

Nadir Mohamed CEO Rogers Communications Inc.

$1,130,769 Base Salary

$25,639,204 Other Compensation includes bonuses, shares, options, pension and any other payments.

$26,769,973 Total (2nd highest in country - Onex CEO Gerald W. Schwartz made a whopping $88mil)

Darren Entwistle CEO TELUS Corporation

$1,375,000 Base

$8,752,702 Other

$10,127,702 Total

George A. Cope CEO BCE Inc.

$1,400,000 Base

$9,563,448 Other

$10,963,448 Total

http://www.canadianbusiness.com/lists-and-rankings/richest-people/top-100-highest-paid-ceos-2015/

Those nice tax havens will come in handy for these people. Considering it's their job to use them in order to boost profits.

I mean no wonder the saying is that people should, y'know, just start a fortune 500 company. These compensations are freakin' sweet!

The top earner on this list made $88mil this year. The top earner made $49mil last year. That's like 80% growth for the top dawg! Canada ROCKS! So just go and start a fortune 500 company, ya lazy bums! lol! I'll get my Filipino telemarketing buddy Manuel to give you a wake up call.

No seriously, does anyone have any ideas for a fortune 500 company?

[Shift-4]

Those nice tax havens will come in handy for these people. Considering it's their job to use them in order to boost profits.

I already pointed out Telus income taxes paid in 2014. Bell was at 25.5%.

They are doing a lousy job of using these tax havens by the looks of it

[Mr. Ambien]

I already pointed out Telus income taxes paid in 2014. Bell was at 25.5%.

They are doing a lousy job of using these tax havens by the looks of it

25%? That's it? Time to vote Fidel Castro.

[TOMapleLaughs]

I already pointed out Telus income taxes paid in 2014. Bell was at 25.5%.

They are doing a lousy job of using these tax havens by the looks of it

Then wtf? They're not doin' der jerrrb! lol

[elvis15]

Oh, I also already knew that you'd complain about my opinion?

Meanwhile, check out the sweet deals that their CEO's are getting:

...

No seriously, does anyone have any ideas for a fortune 500 company?

Good for you? I'll complain about anyone's obviously biased opinion.

But god forbid a fortune 500 company pay their top level employees a lot of money so they can best manage the massive amount of resources and investment into an appropriate direction.

Now about the rest of those points, particularly the first one. Any comment on why people can't just exercise their own option to go buy an iPhone from Apple if they don't like the subsidy system, and why that's the cell phone companies fault?

I already pointed out Telus income taxes paid in 2014. Bell was at 25.5%.

They are doing a lousy job of using these tax havens by the looks of it

[TOMapleLaughs]

Good for you?

But god forbid a fortune 500 company pay their top level employees a lot of money so they can best manage the massive amount of resources and investment into an appropriate direction.

lol Yeah right. None of these people are worth that. Its a poor use of shareholders money and distorts performance as CEOs start managing to their pay metrics instead of longer-term growth. Wouldn't be an issue at all if their income wasn't growing at an alarming rate faster than the rest of ours. (google)

That aside, the main issue brought up in the OP is simple: These companies could easily adopt a policy that helps consumers. Instead, they've (in unison, as they're an oligopoly) rejected that in favour of keeping their insanely high profits intact. They will, however, take a look at it again if the market forces them to. How thoughtful.

[elvis15]

lol Yeah right. None of these people are worth that. Its a poor use of shareholders money and distorts performance as CEOs start managing to their pay metrics instead of longer-term growth. Wouldn't be an issue at all if their income wasn't growing at an alarming rate faster than the rest of ours. (google)

That aside, the main issue brought up in the OP is simple: These companies could easily adopt a policy that helps consumers. Instead, they've (in unison, as they're an oligopoly) rejected that in favour of keeping their insanely high profits intact. They will, however, take a look at it again if the market forces them to. How thoughtful.

Huh, well I guess you proved me wrong. My TELUS stocks must be worthless... oh wait, they've been doing very well the last several years? And the company is actually improving in many areas? So you have no basis in fact for your opinions? (cool)

Here's a shocker, your reasons to think the main iissue is bad are similarly unsupported. It would be bad if the cell companies locked out Apple stores or any other way to buy a phone and use it on their network (like only supporting carrier locked devices) and then forced you to buy through their 'evil' subsidy system, but they don't. They allow you to go buy a phone wherever you like and bring it to use so long as it matches the network, and they allow you to pay for a phone up front through them if you don't want a subsidy or the extra step of going somewhere else. They even let you take the phone you've bought to use somewhere else (so long as you've paid enough to meet your obligations on the phone itself).

But no, you're upset and say they're an oligopoly and have high profits which somehow equals them not helping consumers by giving them a third option to lease a phone.

[TOMapleLaughs]

Huh, well I guess you proved me wrong. My TELUS stocks must be worthless... oh wait, they've been doing very well the last several years? And the company is actually improving in many areas? So you have no basis in fact for your opinions? (cool)

Here's a shocker, your reasons to think the main iissue is bad are similarly unsupported. It would be bad if the cell companies locked out Apple stores or any other way to buy a phone and use it on their network (like only supporting carrier locked devices) and then forced you to buy through their 'evil' subsidy system, but they don't. They allow you to go buy a phone wherever you like and bring it to use so long as it matches the network, and they allow you to pay for a phone up front through them if you don't want a subsidy or the extra step of going somewhere else. They even let you take the phone you've bought to use somewhere else (so long as you've paid enough to meet your obligations on the phone itself).

But no, you're upset and say they're an oligopoly and have high profits which somehow equals them not helping consumers by giving them a third option to lease a phone.

The point was that they're making insane profits, so yeah. However putting that all on the CEO? Yeah right. That's like saying the Canucks are making huge profits all because of Faq. Lawl!

No the main point of the OP is clearly supported. It's just not kind to those who are making the profits on the backs of the consumers they dominate in this country. Eventually they may turn around and support the financing Apple has put forward though and have even said as much. But for now they're not, and they've clearly explained why. It's because that profits will go down.

Yes, there are alternatives than going with these companies' contracts and subsidies while trying to get a new iPhone. But just don't look at these companies if you want it on a deal as good as what Apple just put out there. Making us jump through hoops to get a better deal is just par for the course though, isn't it.

"Just be thankful you're not totally enslaved." Oh goodie.

[elvis15]

Wait, so is the point that they're making huge profits, or that they won't play ball with Apple's lease program?

"We're offering a subsidy program that people keep using even though they have other options and it costs money." Clearly that equals evil corporations only looking to pad their wallets for making you buy a phone in person or order one online from a store other than their own.

"Not totally enslaved"? What are you going to do next, call them Nazis? You clearly don't understand the points being made.

Anything to switch the focus from a failed argument I guess.

[BanTSN]

American carriers have been leasing for years.

What Apple is doing is trying to get people who want their next 'free' phones to be iPhones instead of Android. They're renewing phones every year.

One of the new products the company introduced at its iPhone 6s fall event is the iPhone Upgrade Program that lets you buy a new iPhone every year for as little as $1/day for the cheapest model. The idea isn’t new, as Apple is simply doing what you’ve come to expect from your carrier, but the iPhone maker’s program has many implications on the market. With its upgrade program, Apple can put pressure on carriers and increase competitions, as the company sells unlocked iPhones bundled with AppleCare+ through its own program, which might be more appealing offers to certain buyers.

But there’s one more reason Apple’s iPhone Upgrade Program is pure genius for the company.

Looking at this new initiative that introduces “a couple of interesting new dynamics in the installment plan model, Benedict Evans further explained what subscription iPhones mean for Apple. The program makes the iPhone appear even cheaper than before, offering Apple a way of holding on to the customer and preventing him or her from checking out what the competition has to offer.

“The obvious change is that if you’re on, say, AT&T’s Next plan, your next ‘free’ smartphone might be an iPhone or an Android – with Apple’s plan it’ll be an iPhone,” Evans wrote. “So where for a mobile network these installment + rapid upgrade plans are a way to stop you churning off the network, for Apple they’re a way to stop you churning from iPhone to Android. They’re another way to build the resilience of the ecosystem.”

Not to mention that if Apple ever decides to become a carrier like Google, the customers that’ll be hooked up to Apple’s iPhone Upgrade Program might be among the first ones to jump on Apple’s virtual operator network – this is just speculation at this time, as Apple has flat out denied plans to enter the carrier market.

More interestingly, Evans says that Apple’s upgrade plans will give the company more control over a lucrative market: used second-hand iPhone sales.

With iPhone Upgrade Program, a buyer would essentially lease an iPhone for a year (for $389) and then move to the next device (an optional choice though), and continue paying the lease for the new iPhone.

Rather than selling the old iPhone, or turning it to a trade-in company, the buyer would let Apple handle the device. And the company will likely repurpose it and sell it to customers in emerging markets who can’t afford to pay full sticker price for the latest iPhone model, but want to buy an iPhone.

“The second change is that Apple is explicitly entering the secondary market. If you get a new base-model iPhone every year, you’ll pay Apple $389 a year for a $650 retail price phone every year,” Evans notes. “At the end of the year you give Apple the old one, and it’s going to have to do something to make that back or more. Given the difference is $260 but the resale value of year-old iPhones (unrefurbished) today is $300-$400, that shouldn’t be too hard. It does suggest more incentive for Apple to sell you a case, though.”

The move could help Apple better fight cheap Android devices in emerging markets where more affordable smartphones are the norm. The company would be able to do this without actually creating the cheap iPhone some people expect. At the same time, Apple would still be charging full-price (or more than full-price) for the device, even if that means having to sell it to two buyers.

And the used iPhone market might be a huge unexploited opportunity. “One illuminating data point [about the used iPhone market] is the fact that for the last several years the number of iPhones that seem to be in China (if you look at data from companies like Baidu) has been rather larger than the number of iPhones that Apple’s financial reporting implies could have been sold there. Second-hand closes some of the gap,” Evans noted.

http://bgr.com/2015/09/15/iphone-6s-upgrade-program/

The market will be absolutely flooded with phones, new, used...

...and discarded.

Yo Habib! Check out my iPhone 2,786!