For many years, the two-year contract was king in the US mobile industry. You'd pay $200 to get a shiny new phone, and you'd be stuck for two years. If you broke it or needed to change carriers, you'd have to spend a whole lot more money, and there really were no viable early upgrade options. Contracts also hid the true cost of smartphones, but as no-contract payment plans and early upgrade policies take over, we're faced with a whole new kind of calculation.
How can you get the best deal? Let's check out the current offerings from the big four US carriers and see if we can figure it out.
AT&T is the only carrier that's still fully committed to selling 2-year contract phones, although only AT&T stores can offer them. All the third-party sellers of AT&T devices have to use Next, AT&T's payment plan option. I dare say this is one of the more confusing payment plans offered right now as AT&T has bundled the payment plans and early upgrade stuff into one oddly named package. Note, AT&T will not buy out any payment plans or ETFs you have with other carriers. There's a "buyback" program for your old phone, but it's really not a good deal.
Phones on Next: For your new AT&T Next plan, you pick a phone and the total cost of the device determines how much you'll pay monthly. There are four different versions of AT&T Next. For all of them you own the device and only pay tax (on the full value) at the time of purchase.
Next 24 is divided into 30 monthly payments (I know, it's dumb) and you can upgrade to a new phone after 24 payments (ah, that's where 24 comes from). You also have Next 18 and Next 12 with a total of 24 payments and 20 payments, respectively. They have upgrade options at 18 and 12 months. Finally, there's Next with down payment. This one has a 30% down payment and smaller monthly fees. You can upgrade here after 12 months.
Upgrading: AT&T's upgrading system doesn't seem very fair to me. When you've made the required number of payments (or paid that much in a lump sum), you can trade in your phone and get a new one. The payments start over again and AT&T waves the few remaining payments on the old phone. They're basically buying the device back for almost nothing.