The Pros and Cons of Upgrading Your Cellular Telephone

With more and more people already owning cellular telephones, the cellular industry has come to rely more upon contract renewals and equipment upgrades than on new contracts and customers. Enter the concept of the cellular telephone "upgrade." In the cellular telephone industry, "upgrade" is a term used to denote a contract renewal combined with the purchase of a new cellular telephone at a discounted price. The appeal of an upgrade, from a customer's perspective, is obvious; but there are some pros and cons to upgrading your cellular telephone that you should be aware of when deciding whether to upgrade your phone.

Pros of Upgrading Your Cellphone

New Equipment: The obvious benefit to upgrading your cellphone is the ability to purchase a new phone at a discounted price. Like all electronics, new technology comes into vogue periodically, and new cellular phones often have vastly more features than phones from just a couple of years ago. By upgrading your cellular phone you are able to stay current with the latest technology while getting a stylish new phone to boot.

Discounted Price: The unactivated price for cellular telephones is often in the range of $200 to $300 apiece. By renewing your contract you are able to receive a new telephone at a discounted price, or often for free. The cellular companies will certainly recapture the cost of your new cell phone over the life of a two year contract, so it is worth it for these companies, such as Verizon, AT&T, and Sprint, to invest in you as a customer and to purchase your new phone for you.

Cons of Upgrading Your Cellphone

New Contract: The obvious downside to upgrading your contract is that you must renew your contract to receive the new phone at the discounted price. The industry-standard term for cellular contracts is currently two years, which means that to upgrade your phone you will have to be locked into a service agreement for a term of two years. For some people this is no big deal, especially if they are happy with the service they have already received; but for some people this may be a big disadvantage if they are worried about cost, financial security, or a potential relocation.

No Mid-Term Upgrade Discount: The discounted price on the new cellphone when doing an upgrade is a special price that is contingent upon the renewal of a service agreement. If something happens to your cellphone mid-contract-term, then you will likely have to purchase a new phone at full price ($200 to $300) or pay the early-termination fee to release yourself from your contract. This worry is mitigated somewhat by the option of purchasing insurance on your cellphone either through a service provider directly or through a cellular retailer. For some people who are hard on their cellphones, it may be better to wait to upgrade and to keep their current phone until it quits so as to keep the upgrade option available for unforeseen damage to their current phones.

In conclusion, there are advantages and disadvantages to cellphone upgrades. Upgrading allows one to buy a phone at a discounted price, but only if one renews the service agreement for a two year period. The discounted price on a new phone can be convenient, but this discount can be outweighed by the disadvantages of entering a new and binding service agreement.