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Apple removes option to buy iPhone 6 via AT&T's two-year contract

The move is part of AT&T's ongoing strategy to eliminate smartphone subsidies among third-party retailers and convince more customers to go the installment route.

Apple is no longer sellilng the subsidized version of the iPhone for AT&T customers. CNET

AT&T subscribers who buy an iPhone through Apple will no longer be able to get a subsidized version.

A peek at the Apple online store now shows that AT&T's Next installment plan is the only way you can pick up the iPhone 6 or iPhone 6 Plus if you want AT&T as your carrier. The phone is still available through Verizon and Sprint starting at $199 through the usual two-year agreement.

Following in the footsteps of T-Mobile, which eliminated contracts and subsidized phones more than two years ago, AT&T is trying to drive more customers to buy phones via installment plans. That means you don't pay the cheaper upfront subsidized cost for a phone via a two-year contract. Instead, you pay the full retail price for the phone by shelling out a certain amount of money per month. The industry as a whole has been moving more in the direction of installment plans. The advantage to the mobile carriers is that they avoid paying a subsidy to mobile phone makers. The advantage to consumers is that they're not locked into a contract with the same phone for a full two years and can upgrade to a new one at a certain point.

On Monday, AT&T announced that third-party partners and authorized retailers, such as Apple and Best Buy, would phase out subsidized phones and limit buyers to the carrier's Next program. Under Next, customers enjoy a lower service fee but pay off the full cost of a phone through a specific monthly fee.

The monthly fee varies based on the retail cost of the phone. Through Apple, the 16GB iPhone 6 costs $21.64 per month via AT&T Next, while the 128GB iPhone 6 Plus will set you back $31.64 per month. Directly, AT&T also offers more options through its Next plan. Customers can choose from a range of monthly-installment packages. AT&T Next 12 requires customers pay 20 installments and allows them to upgrade after 12 payments are made.

Those plans, however, are predicated on users trading in their initial device in order to get their hands on the new one. The trade-ins must be fully functional and in "good physical condition," according to AT&T.

The Next installment plan has proven popular among AT&T customers. The carrier said it added 4.1 million people to Next during the first quarter and that more than 30 percent of its customer base are on the Next plan.

OK, but what if you don't want to be saddled with the monthly fee and don't mind being locked into a two-year agreement? You can still get the iPhone through AT&T at the lower subsidized cost. A spokeswoman for the carrier said that AT&T will continue to offer phones through the traditional contract both at its own stores and at its website.

(Via MacRumors)