The Big Question: is Apple's iPhone 7 Upgrade Programme a good deal?

We've whipped out our calculator and worked out whether the monthly scheme is worth your cash...

Apple iPhone 7

Thinking of bagging yourself a new iPhone 7 but don’t fancy paying full whack? Apple’s new Upgrade Programme could be the way to go. 

Launched in the UK alongside the iPhone 7 and 7 Plus, this monthly payments scheme costs from £33.45 per month. This sounds like a great deal for anyone who obsesses over the latest tech, especially since it allows you to grab a brand new iPhone every 11 payments. That’s basically a new iPhone every year. 

Having crunched the numbers, we’ve found the Upgrade Programme can save you money over a standard phone contract. And you get a new iPhone every year as part of the deal. 
Why? Brace yourself for a bit of maths.

A different kind of contract

Apple iPhone 7

If you want to buy a SIM-free iPhone 7 today it’ll cost you £599 even for the bottom-of-the-range 32GB version. That’s quite a lot of money to just have lying around, which is why a lot of people will end up getting their phone on a contract from a network. 

Apple’s Upgrade Programme works the same way as this. Except you only pay for your iPhone of choice, and have to shell out separately for calls, texts and data with either Three, EE, O2 or Vodafone. This is the same arrangement anyone who’s bought a SIM-free iPhone before will have gone through, and it’s not nearly as much faff as it sounds.  

The reason why SIM-only deals are cheaper is (obviously) that the price of the phone isn’t baked into your phone contract. Much to our surprise, this is also the case with Apple’s Upgrade Programme. Shop around and it can be cheaper than signing up to a contract deal.

Cheaper than from a network?

Let’s say that you get a 32GB iPhone 7 on contract on a fairly standard deal. For example, Three offers unlimited calls and texts plus 4GB of data for £1037 over the course of a 24-month contract.  

Coughing up for the same phone over the same period of time on Apple’s Upgrade Programme will potentially set you back £718. This figure includes an initial £49 payment and 20 monthly instalments of £33.45. Remember, it doesn’t include calls, texts or data though, which will add on hundreds of pounds more on to your bill. 

Add Three’s £9-per-month 4GB SIM-free deal with unlimited minutes and texts to Apple’s Upgrade Programme and you’re looking at a total outlay of about £934 over two years. This includes AppleCare+ cover over the same period, which covers you for accidental damage - as long as you cough up an excess fee of £25 for a screen replacement, or £79 for other damage. 

That means that an iPhone 7 on Apple's Upgrade Programme could save you a little over £100 over a two-year period. But there's more.

The Upgrade Programme discount

Apple iPhone 7

The deal gets even better if you plan on sticking around for longer than the initial 20-month period.

Once you've made at least 11 of your 20 instalments, you're free to trigger your upgrade option. This isn't quite as simple as it sounds: your current phone must be in what Apple considers to be 'good physical and operational condition', you'll need to pay another £49 upfront payment, and upgrading will see you start a new 20-month instalment loan.

Because this is a new loan, there's no way of knowing exactly how much this next upgrade will end up costing you. iPhone prices are prone to fluctuation: in the US, Apple’s entry-level iPhone costs the same as it did last year, in the UK it costs more, and in Japan it costs less. But assuming there isn't a huge swing, we'd say it's likely to remain a good deal.

Consider this scenario: two friends both get the iPhone 7 this month, one on contract (let's call him Steve J) and one on Apple's Upgrade Programme (Tim C). After one year, Steve is stuck with his iPhone 7. Tim, meanwhile, can trigger a new 20-month term with Apple and upgrade to the iPhone 7s.

A year later, in 2018, Steve finally gets his hands on an iPhone 8 and starts a new two-year contract with Three or whoever. Tim, though, is able to do the same. Not only has he potentially saved money and got the otherwise pricey AppleCare+ thrown in, but he's had three new iPhones to Steve's two over the same time frame.

There is one potential drawbacks though: Steve will be able to sell his old iPhone 7 when he upgrades to the 8, whereas Tim will have to give his iPhone 7s back. Yes, he'll get to keep the iPhone 8 when his new contract finally expires, but he'll have had one phone less to sell overall.

Apple’s Upgrade Programme: should you sign up?

Despite losing out on one potential phone sale, the Apple Upgrade Programme seems like a great deal. You're likely to save money over a contract, especially if you shop around for a great SIM-only deal, and provided Apple doesn't raise its prices substantially should you renew. Not only does the payments scheme hand you the latest iPhone each year, it also bundles in AppleCare+ to ensure against any accidental damage or breakage. 

And if you feel like quitting the scheme after 20 payments? You’ll get to keep the latest iPhone that you have to hand. 

That said, anyone signing up to the Upgrade Programme needs to be sure their head won’t be turned by the Samsung Galaxy S8 or an OnePlus 3-style wonder over the course of almost two years, because it offers greater benefits the longer you keep signed up. Give up after one 20-month period and you won't have saved that much. 

But if you're an iOS acolyte who plans to stick with Apple through thick and thin but can't afford to buy their phones SIM-free, it's a bit of a no-brainer.

Liked that? Read this...