The plans start at $32.45 a month for the 16GB iPhone 6s, and $37.45 a month for the 16GB iPhone 6s Plus. Pricing goes up by $5 a month for storage bumps to 64GB ($37.45 for the 6s and $42.45 for the 6s Plus) and 128GB ($42.45 and $47.45).
The plan is only available for purchase or pickup at Apple’s U.S. retail stores, and requires a valid American credit card. What’s more, the phone must be activated on AT&T, Sprint, T-Mobile, or Verizon.
Apple will let iPhone Upgrade plan customers get a new phone every year, but it won’t be required. Customers can trade in the phone at any point after 12 months, and get a new model. The payment term is technically 24 months long, which makes a $649 iPhone 6s with 16GB cost $778.80 if paid out in full.
Because AppleCare+ costs $99 for these two new models separately, it's worth taking advantage of Apple's new plan only if you intend to get AppleCare+ and trade in from between 12 months and about 18 months. Otherwise, carrier plans are cheaper. (AppleCare+ is $79 for earlier phones.)
AppleCare+ covers two years of phone support, compared to 90 days with a regular purchase. Customers will get two years of hardware repair, up from a single year included in the basic warranty. AppleCare+ covers damage or defects to the iPhone, its battery, and earphones, as well as accessories purchased at the same time. This includes a fixed $99 fee for up to two incidents of “accidental” damage, like breaking a screen.
Cell carriers already offer similar plans, where the full cost of a phone is divided into a certain number of interest-free payments, and an upgrade is available with a trade-in several months before the end of the plan. AT&T Next, for example, would take a $649 iPhone 6s and let you upgrade after 12 payments with a 20-month installment plan of $32.45 each, or after 18 payments on a 24-month plan of $27 a month.
T-Mobile’s Jump! On Demand is based on an 24-month term with up to three trade-in upgrades for new phones each year. However, if you keep the same phone, after 18 months you have to pay a lump sum of the remaining six payments to keep it without a trade-in.
Apple has also quietly added a similar plan to Verizon with this release, offering a zero-down, no-interest 24-month installment plan with no early trade-in listed, whether purchased from an Apple retail store, its online store, via a carrier, or through authorized resellers.
Bottom line: Apple’s iPhone Upgrade plan makes financial sense if you want AppleCare+ and you plan to upgrade between 12 and 18 months, because AppleCare+’s cost is divided up among installments with this plan. Purchasing AppleCare+ in all other cases requires spending $99 upfront, whether or not you keep the phone for the full two years.
On a 12-month upgrade cycle, you would pay Apple $389.40, while you’d pay AT&T $488.40 ($32.45 per month on its 20-installment plan plus $99 for AppleCare+) and T-Mobile $423.50 ($27 per month plus $99 for AppleCare).
At 18 months, Apple would be $584.10, while you could use AT&T’s 24-installment plan ($27 a month) and pay $585. T-Mobile would be $585.75.
If you don’t plan on buying AppleCare+ or want to keep a phone for two years, carrier options are cheaper.