Are you saying that Next is better? Next only works for those changing phones often. At 20 month with approximately $28 per month, you pay $560 for a device you don't own plus your monthly plan charges. At 24 months, that's $672 plus monthly charges. Doubt the 32GB at full price costs that much.
Posted via My Samsung Galaxy S4 Handheld Device
I would give example on the iPhone since Galaxy s6 it's not released yet.
Your analysis is fairly good, but it misses a critcal piece of the whole picture.
When a customer upgrades their phone and they are under a Mobile Share plan (the only plans offered to new AT&T customers for the last year, and the plans that many customers switched to starting in early 2014) the customer is going to be paying full price for their talk & text portion of their bill. This means that were a customer is currently paying $15 or $25 (dependign upon their data plan) they will be paying $40 each month, so over the course of a 2 year service contract, the customer will pay up to $600 more in service charges to get the reduced price phone that saves them $450 in purchase price. Yes, AT&T may "lose" money on the sale of the phone, but they more than make it up on the monthly service charges you have to pay for the next 2 years. Each person has to do the math for themselves and their specific plan type, data details, and phone. Customers on a Mobile Share plan with 10GB of data or higher will actually pay $299 (subsidized phone price) + $40 (activation/upgrade fee) + $600 (increased service fee) or $939. The same customer buying their phone with AT&T NEXT will pay $749.99 (full phone cost) + $0 (activation/upgrade fee) + $0 (increased service fee) or $749.99. Both sets of numbers are for your 64 GB iPhone 6, and both sets ignore sales tax because in some markets the custmer must pay the sales tax on the full phone price even if they get it at the contract subsidized price, otherwise you will also pay the sales tax difference on the $450 contract subsized amount you won't be getting on the NEXT agreement). If that same user has les than 10GB data, replace the $600 (increased service fee) with $360 and do your own comparison. If by chance, you happen to have a grandfathered Family Talk plan, then you don't get the out of contract discounts, so you always pay the higher service fees (even if your contract has expired) so that AT&T doesn't really "lose" any money on the deal either.
Yeah, as you can see, AT&T has it "baked" into their prices so that they don't "lose" any money, they get it from you one way or another, so it is always wise to look at all your options and make the decision that makes the most sense for you. When you do look, don't forget to look at all the variables though, as many overlooked the service price difference and later regretted their choice because by the time they realized their error, it was too late to change things and they were left paying more money that they didn't need to.