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Bullish Cross Live

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Why Apple will likely Rally back to $550 by March

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How Verizon paid me $800 to go to AT&T

Last year I wrote a story entitled “How AT&T paid me $173.82 to go to Verizon.” Now it seems that Verizon is outright giving me an $800 incentive to transfer my service back to AT&T. And this story applies to anyone interested in an early upgrade to the iPhone 5C or iPhone 5S. I don’t know what it is with phone carriers, but they clearly have the most idiotic customer retention policies ever conceived.

Since the introduction of the first iPhone back in 2007, I’ve upgrading to the new iPhone each year and plan to do the same this year with the iPhone 5S. Until the iPhone 5 was introduced last year, I had very little problems doing so with iPhone 3G, 3GS, 4, and 4S. But for whatever reason, both AT&T and Verizon have decided to essentially do away with their early upgrade policy which makes no sense because anyone can upgrade early at a reduced rate by just simply canceling their contract, paying the early termination fee and moving to the new phone carrier. Doing those three things amounts to the same price as the old early upgrade fee that both Verizon and AT&T have decided to essentially do away with.

What’s more, with Apple’s new iPhone trade-in program, you can sell back the iPhone 5 which will likely cover the early termination fee and thus allow you to purchase a new iPhone 5S at the subsidized rate of $199.99 provided that you’re willing to switch carriers.

Here’s how this all works. Right now, Verizon has no program of offering its customers an early upgrade price for the iPhone 5S. Basically, if you purchased an iPhone 5 last September, then it will cost you $649.99 to buy an iPhone 5S with 16GB of storage. The price of a fully subsidized contract rate of a new iPhone 5S is only $199.99.

Thus, Verizon essentially leaves those customers who want to upgrade to the iPhone 5S with two options. They can either pay the $649.99 price of the iPhone 5S; or they could simply cancel their contract with Verizon, pay the $240 early termination fee and then buy the iPhone 5S at AT&T for $199.99. The total cost of leaving Verizon and going to AT&T is $440.00. This means that Verizon is giving every one of its customers who want to upgrade to the iPhone 5S early a $210 incentive to transfer their service to AT&T this month!

In my case, I have a family plan with four lines to transfer. That means it’s $210 per iPhone 5S or just about $840.00. What Verizon and presumably AT&T should be doing is telling its customers that they can simply pay out the contract price which would allow them to upgrade to the new iPhone 5S at the new subsidized rate i.e. the cost to buy a new iPhone 5S is $439.99.

And here’s the kicker in all of this. In spite of Verizon’s total stupidity when it comes to customer retention, I offer to just simply cancel my account, open a new account with Verizon and have the numbers ported over. By doing this, I would pay out the contract price, close the account and buy new iPhone 5S’s with a brand new account. It sounds great in theory right?

Wrong! Verizon cannot port over numbers to another Verizon account! WTF!? So my only option is to pay Verizon $880 more to stay with them or simply cancel, go to AT&T and port my numbers over to them? This is precisely why these companies will simply not survive future innovations in VoIP just as Blockbuster couldn’t survive Netflix — a company they could have bought for pocket change when they were emerging back in 2001.

A final point that is worth making here is that if your iPhone 5 is in relatively good shape, you can sell it back to Apple and it will probably cover the early termination fee if not more. This will make it possible to purchase a new iPhone 5S at the subsidized rate. So even if you aren’t eligible for an upgrade, you may still be able to upgrade at the cost of trading in your iPhone 5 and switching carriers.

Andy Zaky

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