Andy Zaky was paid $172 by AT&T to buy his new iPhone 5

So… Andy Zaky discovered something that many of us have noticed every year for the last 4 years:

So essentially, what AT&T told me today was that I can stay at AT&T and pay $500.00 to upgrade two of our iPhone 4S’s to iPhone 5′s (in addition to the $199.99 price per phone), OR I can leave AT&T pay $320 and then get the iPhone 5′s for the normal $199 price elsewhere.

ETFs are a funny thing. If you’re buying a $650 phone with a subsidy for $199, then a $300 fee to cancel your contract isn’t high enough to cover the opportunity cost.

Early Adopters

Anyone willing to pay $530 for a new phone only a year after they bought their last iPhone is not a typical customer. I know there are many of us that do, but we are the exception.

My good friend Caleb Hicks over at and I had a conversation about this on the day the iPhone was announced. Both of us picked up new contracts with the iPhone 4S and both of us will be buying the iPhone 5. So, why not save at least $150 per phone? Too much hassle.

I’m not sure our wives would go for us changing phone carriers every year. The $650 we spend on phones is bad enough.

Customer Service

For most customers the ETF is already too high, to increase it to cover the opportunity cost to move would be pointless 99% of the time. I know he’s not suggesting AT&T raise their ETFs, what do you think he’s suggesting? That they give subsidized phones more frequently. It’s not going to happen. Zaky is off base. He is a unique customer.

Customer service reps are often handicapped by policy – just try to find one that has a tendency to ignore his handicaps. Zaky found a rep that was willing to find a loophole and make things right for him.

Joshua Howland

Joshua is a mobile application developer, entrepreneur, and technology enthusiast. His favorite posts to write compare companies and products. He loves sports and start ups and talks about them (along with tech) on Twitter (@jkhowland) and his blog (

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