The figures for other flagships such as Samsung’s Galaxy S4 or HTC’s One are similar (both have the same pricing). Under Jump, the first six months cost $280, while depreciation on the $580 retail price would be close to $145 — again, roughly half as much.
Of course, with Jump you also get the insurance bundled in, but that still doesn’t fully explain the cost difference. You could purchase standalone handset protection from T MOBILE US INC (NYSE:TMUS) for $8 per month, or $48 for six months. There’s also the added convenience of an easy trade-in instead of having to sell your device on eBay Inc (NASDAQ:EBAY) or Craigslist, but how much is that convenience worth?
Look before you jump
As it stands, Jump isn’t all that great of a deal. Customers who are interested in semiannual upgrades are better off just reselling their phones when they want to upgrade. You don’t even have to necessarily pay full price upfront, since T MOBILE US INC (NYSE:TMUS) still offers financing plans; you’d just sell your device and pay off the balance when you’re ready to make the switch.
Jump’s incremental $2 per month over standalone insurance sounds enticing, but it appears that the carrier may profit on the trade-in once it turns around and resells the used device, since it’s not giving back any residual value.
Don’t make the Jump.
The article Should You Buy Into T-Mobile’s Jump? originally appeared on Fool.com is written by Evan Niu, CFA.
Fool contributor Evan Niu, CFA, owns shares of Apple and Verizon Communications. The Motley Fool recommends and owns shares of Apple.
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