An iPhone 5 upgrade for on-contract AT&T customers might be really expensive

By , Sep 11, 2012

So, you want to upgrade your current phone to the iPhone 5? The first step you need to take, is to see whether or not you qualify for a fully subsidized upgrade with no penalty.

AT&T makes this process particularly easy, all you have to do is dial *NEW# (*639#), and you will receive a text message laying out your eligibility. For Verizon users, Big Red has provided a website that you can go to to verify your upgradability, or you can dial #874.

In the past, AT&T has let users who are only partially through an existing contract to upgrade without any penalties. Whether or not they plan on doing this with the iPhone 5 remains to be seen, but from what I’ve seen thus far, it’s not looking entirely promising.

The sad fact is, that if AT&T doesn’t allow folks in the middle of their contracts to upgrade for free, it might make more sense to buy the device off contract, assuming Apple will have those available on launch day.

Let’s do the math:

$250 upgrade free + $199 base iPhone 5 + $36 activation fee = $485, and that’s not including any taxes involved. Let’s just say there’s a conservative 5% tax on that entire package, and you’re looking at roughly $509.

An off-contract base iPhone 5 will probably be about the same price as base off-contract iPhone 4S at $649. So for just $150 more, you’ll save yourself from having to lock into another two-year commitment, where the same issue could come around and bite you again. Hopefully AT&T realizes this, and allows mid-term contract users to early upgrade without penalty.

The only place where this would be an issue is if Apple doesn’t have unlocked phones on launch, which is, judging from previous launches, totally within the realm of possibilities.

For those of you who are in a similar situation, what will you do? Will you bite the bullet, and pay upwards of $500 for a new iPhone 5, will you switch providers, or will you wait it out until unlocked devices are available?

Our complete iPhone 5 event coverage:

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  • http://twitter.com/jwap13 Jeff

    *639#

    • nnfdcane

      When I dial *639# it says “your request is being processed. A message will be sent shortly”. I have been trying this for 3 days now and still have not received a text????

  • http://twitter.com/FoundTP FoundTP

    Little off topic because i am out of contract with att, but will it be a nighmare to switch to verizon? att doesn’t have lte in my area ant therefore losing my business.

    • No Whammy

      Why would it be a pain? …the only thing I can think of is having your number switched, that takes maybe 2-3 hours max. Usually it’s within an hour and you get to use your new phone with a temporary number until it switches. Just make sure you have your AT&T info handy because you’ll need to release your number to Verizon.

  • Solowalker

    Well, it’s not horrible if you have the money because you can then turn around and resell your 4S unlocked to someone and get ~$400 for it. So in-contract upgrade would be about $100 net cost. If you wanted to pay about $100 per year to always have the latest iPhone, that’s doable, if you don’t mind continuously being under contract.

    I doubt AT&T will ever have a mid-contract upgrade for no penalty. They do offer quite a heavy subsidy for the iPhone that they need to make back and then need to make a profit. I’m fine with people making money. What I don’t like is the blanket $250 early termination fee (which is basically what this early-upgrade fee is). All contracts should have a gradually diminishing fee. They can bake in a couple extra months for profit if they wanted, but it’s ridiculous when you get to a point where you’ll be charged $250 but then if you wait until the next day, you don’t have to pay that. Stupid.

  • http://www.facebook.com/kyle.zeltmann Kyle Zeltmann

    *639#
    FTFY

  • Al

    I have line that is eligible for upgrade on the 21st of this month…

    But that upgrade fee is included in the bill, you don’t have to pay upfront..

  • http://twitter.com/Jackzzz99 Jack Wong

    I would rather buy a fully unlocked iPhone in full price if it is available on the first day…

  • http://twitter.com/e420kush e420Kush

    AT&T fucked up my contract when they ported my phone number from a different carrier…Got my iPhone 4S last october when they were released and now I am eligible for a full upgrade with just a fee of $36 Dollars. WOOT! Any chance i get to STICK IT TO AT&T I WILL! HA! Screw your outrageous prices and upgrade fees…I will call and get my 36 dollar fee waived too. HA!

    • http://twitter.com/Mclovin251 Thomas Cruz

      I did the same thing last year and I have to pay 250 WTF

  • http://www.facebook.com/antman217 Anthony Antunez

    Awesome I am eligible for a full discount. But damn that upgrade fee went up, I only payed $18 last time.

  • http://twitter.com/rexexdesign Alexander Reimann

    Yay, I’m eligible for an upgrade, but I’m not sure if I really want to continue my contract. The Prepaid plans would save me a ton of money, I just have the price of the iPhone to begin with… but then again, I can sell my old iPhone… we will have to see

    • No Whammy

      Careful with the prepaid plans. At&T’s unlimited prepaid data doesn’t apply to smartphones, and somehow they can tell what kind of phone you’re using.

  • http://www.facebook.com/RaulAmericanista Raul Torres

    I’m using another lines upgrade !! Cant Wait !!

  • http://twitter.com/KraKsX KraKsX

    i recently did this same math (forgot stupid upgrade fee), I’m really looking at just buying factory unlocked iPhone 5,

  • Fred

    What do you consider mid contract? I’ve had an iphone since the original & I have always been allowed to upgrade after 1 yr. 1 yr is halfway thru a 2 yr commitment, or mid contract. I’ve never had to wait the entire 2 yrs to upgrade my device. Actually AT&T let me upgrade early when the IPhone 4 came out. This has been the standard for years and shouldn’t surprise anyone

    • http://www.3sixtydegreescouting.com/ Greg Braddock

      I think hes saying it looks as though the policy is changing.

    • http://twitter.com/GuyBey0ndC00L eDDie

      Yes what you say is very true. But now AT&T is asking $250 + ( plus ) the Price of the iPhone 5 $200 for 16gb Plus $36 for upgrade fee. That’s close too $500.  Old upgrade plan you ONLY pay for the New iPhone & fee which will be around $236 for 16gb & upgrade fee before taxes. I called AT&T Custom Service 2x and right now that *639# number is for iPhone 4S & other Smart phones NOT iPhone 5. Even though Apple has a announce pricing for iPhone 5. AT&T systems are NOT showing pricing yet. So we maybe in luck.  

  • Confess Your Sins

    I let my AT&T contract lapse years ago, and have been paying full price for phones (Nokia, then Google, nothing against the iPhone) ever since. It’s so hard to get off the subsidized phone merry-go-round, but well worth the peace of mind & lack of hassle, if you can afford it. It’s cheaper in the long run, considering your phone’s resale value & that you can change service plans whenever you like. But you already knew that.

  • chjode

    This has been the case for a few years. For me, during the iPhone 4 launch in 2010, I wasn’t eligible for full upgrade pricing as I had purchased an iPhone 3GS just a year earlier. So, I paid ~$400 for the iPhone 4 ($200 upgrade price + $200 fee). That said, this year, I’m going to buy an unlocked phone and take it to StraightTalk or T-Mobile.

  • Bren Miranda

    I’m so glad I’m under my parents account. I’ll just use someone else’s upgrade that’s on the line.

  • http://twitter.com/Max_Kas Max Kaslick

    It might be cheaper to cancel your current line and start a new one. Just pay for it with the $425ish you get for your no contract iPhone 4S.
    Either that or tell AT&T that your going to switch to verizon if they don’t let you early upgrade.

    • http://www.facebook.com/jack.marchetti Jack Marchetti

      I said that to AT&T and they said “well it’s still cheaper to stay with us” lol

  • http://www.facebook.com/profile.php?id=100000223936151 Jerry PowerHouse

    im planning to pay full price off contract at&t 64gb iphone 5..contracts are for dummies IF you have the $ to pay full price

    • http://twitter.com/shark101au Christian Skilbeck

      Sounds like you do’t have the $’s to afford a contract.

    • http://twitter.com/e420kush e420Kush

      why is that? Not like there are any good pre paid plans here in the states. We don’t get any kind of “bonus plan” (cheaper rate) for not being on contract. Its the exact same price with a 2 yr contract, so who’s the dummy? Lets see, I have to have a phone, So either pay 80-90 dollars a month and only pay 199-399 for a brand new iPhone under contract, or pay 80-90 dollars a month plus have to pay 500-800 for an off contract, unlocked iPhone.

  • http://twitter.com/tciitb TheCatIsInTheBag

    cant you buy at full price at at&t (or other), then unlock since is “out of contract”?

  • http://www.facebook.com/aaron.m.brannan Aaron Brannan

    Oh sweet! So glad I found out about this! They offered me the same thing just without the $250! So I renew my contract and pay $36 and I get it at contract price! Thanks SO much Jeff! I was worried I’d have to sell an arm and a leg!

  • http://www.facebook.com/manuel.pitt.52 Manuel Pitt

    i am going to get it unlock

  • http://www.3sixtydegreescouting.com/ Greg Braddock

    That whole policy is stupid. AT&T gets their money and then some. It’s not like people are getting the upgrades and running to another carrier. Idiots. Subsidies are GREATLY satisfied.

  • http://twitter.com/samurai_kidz Nickson Ng Junn Ee

    so hope malaysia have this kind of things…..’ can upgrade to iphone 5′

  • http://www.facebook.com/abdelazizi Aziz Idrissi

    As a valued customer, we can offer you an upgrade with a new 2-yr commitment and an $36 upgrade fee.

    • Maria

      So did they allow you to get the early iPhone 5 upgrade with a new 2yr commitment and a $36 upgrade fee? Or did they make you pay the $250 upgrade fee? I got the same message you did and want to know if I’ll end up having to pay the additional $250

  • http://twitter.com/HiTekkSteff Stephaughn Alston

    I didn’t get the message about paying the $250 upgrade fee, it just said “We can offer you an early iPhone upgrade with a new 2yr commitment and a $36 upgrade fee”.

    • Maria

      So did they allow you to get the early iPhone 5 upgrade with a new 2yr commitment and a $36 upgrade fee? Or did they make you pay the $250 upgrade fee? I’m curious because I received the same message you did, “We can offer you an early iPhone upgrade with a new 2yr commitment and a $36 upgrade fee”

      • http://twitter.com/HiTekkSteff Stephaughn Alston

        Just paid for the phone & got the $36 upgrade fee!

  • OBAMA OBAMA OBAMA!!!!!!!!!!!!!

    IPHONE RULES!!!!!!!!!!! I’M PAYING WHATEVA TO UPGRADE!!!!!!!!!!

    • http://twitter.com/e420kush e420Kush

      thats the reason why there is a $250 rate to upgrade, cuz they know people will pay it!

      • guest

        not me…..No way I’m paying $250 to upgrade….If Apple wants their customers to buy the latest iphone they better get AT&T to quit being greedy and do what they have done in the past. They must think we’re 80 years old and have the memory of a fish on Finding Nemo.

  • Mysteroy3k

    I was told only $36 and 2year commitment , I have the 4s

    • http://www.facebook.com/jack.marchetti Jack Marchetti

      really? I was told I had to pay the $250 + $36 + new 2 year committment. I bought my 4S in Oct 2011

  • Mrblackjapa

    The sad thing is that I want a 64 gig waiting to see in oct if tmoble will be running unlocked iPhones on 3G or still just on edge with their new 3g iPhone sims kit , AT&T cost too much

  • jen

    you dont have to get the upgration fee its just another way of either not getting you to get at&t which is really good with iphone or that apple just wants more money.

  • i f

    FUCK JAP CHINKS! OBAMA FOR LIFE!

  • ic0dex

    From what it looks like Apple will have plenty ATT iPhone 5’s in stock. I’m just going to sell me Unlocked iPhone 4S for $400 add $250 and I’ll have a brand new iPhone 5 that’s unlocked.

  • http://www.facebook.com/jack.marchetti Jack Marchetti

    Talking with AT&T now and looks like they won’t offer mid term users the full discount. So a lot of 4S customers are going to be pissed.

  • http://www.facebook.com/andrew.helms.5 Andrew Helms

    I’m switching. I have two iphone 4s’ and an almost $200 bill a month and they wont do a full subsidy for someone who’s been with them for 5 years? Ridiculous. I hope enough people complain, so we can get the discount, but as it sits now, I can cancel and switch to verizon for 830 or pay 1000 bucks to stay with ATT. Seems like a no brainer to me.

  • Christopher M.

    Payment of the balance on your account may allow you to qualify for an upgrade. That’s what I got!

  • http://twitter.com/Coolmall Applejack

    This is bulllcrap AT&T better fix this because this is getting out of hand !!! I will go to Verizon !!!

  • http://www.facebook.com/sarahpederson Sarah Pederson

    I upgraded to the 4s last October. ATT just promised me that on October 8 I can get the Iphone 5 for $199.

  • Dave

    Has anyone else looked at the info on the early rearm. fee? If you’re like me you bought the 4S day one… my new 2 yr agreement kicked in that day so, in theory I have completed 12 (maybe 11) months of my contract. It states that the ETF is $325 minus $10 for every month you have completed of your two yr agreement.

    So… should that mean that I can minus $120 (or $110) off of the $325?? If so, that would only be $205 ($215). That’s easy as pie to bounce AT&T when you have a jailbroken iPhone 4S to sell on ebay… If I can get close to $400 on ebay I can kiss AT&T goodbye and come fairly close to getting the new phone from a different provider. I know a lot of people have mentioned buying the phone outright… but wouldnt you still be stuck with AT&T? Do you really want to be since you have to work the system just to get the phone???

    Suits will never get it!! I’ve been with AT&T since the launch of the original iPhone and they’re willing to let customers walk away for a greedy one time $250 fee, vs. keeping ALL of those customers who have loyally stayed with them?? In this economy, that’s a dumb move…

  • http://twitter.com/law877 Darren13

    I have a family plan. My wife is eligible for an upgrade and I am not. She does not care about what phone she has. I see that they changed the SIM card so a simple swap of the SIM card is not possible. Is there a way that I can get her the iPhone 5 and then change it to my number? Thanks.

  • Michelle Michelle

    It looks like everyone who upgraded to 4S when it’s just came out are not eligible for the Iphone 5 upgrade without fee.

    • http://twitter.com/e420kush e420Kush

      not true. I am.

  • http://www.facebook.com/strangelander Mario Saldana

    This is what i got can someone tell me how much im paying.

    As a valued customer, we can offer you an upgrade with a new 2-yr commitment and an $36 upgrade fee.

    • http://twitter.com/e420kush e420Kush

      You can get a full upgrade discount. So 16 GB $199 32 GB $299 64 GB $399.

  • http://www.facebook.com/stephen.m.simon Stephen Michael Simon

    I so regret getting the 4S last year! My mom is going to have the new 5 before me (and she still is loving her 3GS)… haha

  • Guest

    So did they allow you to get the early iPhone 5 upgrade with a new 2yr commitment and a $36 upgrade fee? Or did they make you pay the $250 upgrade fee? I’m curious because I received the same message you did, “We can offer you an early iPhone upgrade with a new 2yr commitment and a $36 upgrade fee.”