Comment by minthd

Actually ,people in the end do pay more, but it's subtle.

Say you we're a customer that bought an iPhone every 2 years.

Now Apple's yearly plan looks like:

1. A new iPhone every year + Apple care

2. Same price

3. Don't have to deal with salesman at carrier store.

So more people will be tricked for new iPhone every year.

And once this becomes the standard , since Apple is a status symbol - suddenly buying a phone every 2 years carries less status.