No subsidy, no smartphone? The bottom line on upgrades

Carrier plans are full of gotchas, but the results of this price comparison may surprise you

The era of the subsidized phone is coming to an end. Will that also end the reasonable ability to get a new iPhone, Android smartphone, or Lumia every two years? The surprising answer is no -- if everyone on your plan already has a smartphone.

I ran the numbers to see whether now is the time to get a subsidized smartphone while you still can from AT&T or Verizon, the major U.S. carriers. They'll be largely ending these subsidies in the next month or two. (Some people will still be able to get them directly from the carrier, but it won't be easy.)

Instead, you'll either pay the full price up front for your smartphones, or you'll pay for the smartphone on installments, with the pro-rated cost added to your bill each month. Yes, I know that's how the rest of the world has long worked, but in the United States this is a big change.

For example, a couple on Verizon's old plan pays $160 per month for 2GB of data per line, plus a one-time charge of $300 plus sales tax per 64GB iPhone 6. That totals $4,440 over two years, not including tax on the devices.

On the current More Everything plan, that monthly cost for 4GB of shared data is $110 -- plus the full $750 cost plus tax per 64GB iPhone, divided into 24 installments. Over two years, the total price drops from $4,440 to $4,140. (The tax on the smartphones is not included in either figure, as that varies from location to location.) Prefer a Galaxy S6? A 64GB model costs $785, so you'll pay $70 more over that two-year period for the pair.

AT&T's Mobile Share Value plan with Next device purchasing is basically the same, though it stretches the device payments over 30 months to make it seem cheaper. A similar AT&T plan to what I outline above for Verizon would cost you $4,380 plus tax on the devices. AT&T is a bit costlier because the carrier makes you buy bigger and thus pricier buckets of data than Verizon does. (To be comparable over a two-year period, my AT&T calculations have you pay off the phones in 24 months, not 30. The actual smartphone cost is the same at both carriers.)

The bottom line: You don't need to get a subsidized phone while you still can. In fact, it might cost you more if you do.

There's one exception: The current plans penalize you for having a "dumb" phone. They used to cost $10 to $15 per month (in what is now the device access charge) to add to a shared plan, but at Verizon now they cost $30 each, versus $40 for smartphones in both the new and old plans. AT&T's pricing is more convoluted, so the device access charge varies based on how much data you buy, but it too has effectively penalized the purchase of "dumb" phones, in hopes you'll pay $10 more per month for a smartphone and not realize you'll likely also need to buy more data.

I know "dumb" phones are on the way out -- AT&T didn't even have any for sale at its website -- but they still make sense for some oldsters (who don't care about a handheld computer and find touchscreens difficult to use) and some youngsters (who you don't want to be online too much outside of your purview).

In case you're wondering: T-Mobile dropped subsidies a couple years ago, but Sprint still offers them. However, these carriers' 4G coverage is still very uneven and unreliable, so I'm not including them in this comparison. If they have good coverage where you use your smartphones, you can calculate their complete costs yourself. They're usually a bit cheaper than AT&T and Verizon. 

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