A major shift is happening in the wireless industry. Expect changes to the plans on offer, a protracted price war, and for the iPhone to no longer "cost" only $200.

Two major changes to the biggest wireless carriers occurred over the past few days: Verizon decided to drop its device subsidy plan (also known as the standard 2-year contract). Then AT&T, newly merged with DirecTV, launched a promotion to get wireline subscribers of DirecTV or U-verse to switch their mobile phone service -- but only for AT&T's unsubsidized "Next" plan.

Put together, the two moves by Verizon and AT&T represent a major (if not finalized) shift away from subsidizing smartphone purchases -- once the norm -- and towards the "unlocked future" discussed in Latin Post Tech's six-month hands on review of the Moto X 2014.

Here's what you need to know.

AT&T's $500 Switch to 'Next' Promotion

On Monday, AT&T announced that DirecTV customers or those subscribed to AT&T's digital Internet and TV service, U-verse, will get up to $500 in credits for each wireless line they switch to AT&T Next. "Next" is an unsubsidized smartphone plan based on customers paying the full price for a phone through monthly installments. It allows customers more frequent device upgrades, but also put the burden of paying off the full price of a smartphone on customers, if they decide to leave.  

According to Forbes, the $500 switch-to-Next promotion is made up of two major discounts: A $300 bill credit per each line that's moved to AT&T Next with a new smartphone purchase, and a $200 credit for trading in an eligible smartphone. The deal is available to both residential and business customers.

On top of that, subscribers who combine their AT&T wireless and DirecTV or U-Verse TV bills into a single bill are eligible for 10,000 "Plenti" points -- a rewards program with American Express and several companies like Mobil and RiteAid. Additional small monthly discounts on combined monthly AT&T bills and a new discounted DirecTV/AT&T combination deal called the "All in One Plan" are on offer as well, as part of the company's unsubsidized wireless offensive.

Verizon Going Unlocked Only

On Friday of last week, Verizon announced it was getting rid of the two-year contract -- which means a larger degree of freedom for customers by default (no more early termination fees, for example), but also no more subsidized smartphones. The change will take effect for all new customers beginning August 13, according to Verizon's announcement (via TIME).

Verizon played the change as a way for customers to simplify their bills and customize the amount of data to match their lifestyles. New plans will come in four sizes, ranging from the "Small", 1GB of sharable data for $30 per month, to X"-Large", where $80 per month gets you 12 GB of sharable data. Extra data can be added any month to any plan for $15 per GB.

Unlimited talk and text applies to all plans through a $20 per month line-access charge for every smartphone (tablets and wireless hotspot "Jetpack" devices cost $10, and smartwatches cost $5 per month).

The mid-August switch away from contracts is also about simplifying things for Verizon, which previously offered the standard two-year subsidized contract along with other unsubsidized plans. For example, now the Verizon "Edge" device payment plan -- where customers pay the whole cost of their phone on a monthly basis -- will just be the default, rather than subsidized phones with a contract.

Or, you can avoid the monthly smartphone payment by buying the full-priced smartphone from the start.

The Unlocked Future is Here

As we presaged in the Moto X review -- and were subsequently proved right when Motorola announced its 2015 device lineup, which are all selling for the full price and carrier-unlocked -- the wireless industry is moving towards device ownership and away from contractual obligations for a number of reasons.

Last year, unlocking mobile devices became legal again and easier to do by a voluntary agreement among wireless companies (thanks to regulatory threats from the FCC's Tom Wheeler). That allowed customers to pick up and move to a different carrier if they finished their contract, owned, or finished paying for their smartphone.

At the same time, T-Mobile was launching its disruptive "Uncarrier" changes and other major carriers were deciding they no longer wanted to take the hit of subsidizing a $600+ iPhone down to $200, especially since the smartphone market was now fully saturated.

As AT&T's CEO Randall Stephenson envisioned the coming trend more than 18 months ago, "When you're growing the business initially, you have to do aggressive device subsidies to get people on the network. But as you approach 90 percent penetration, you move into maintenance mode. That means more device upgrades. And the model has to change. You can't afford to subsidize devices like that."

On the future model that's now on cusp of becoming the norm, Stephenson added, "You can use your own device or finance it. I think this will be very powerful. It's where we see the market going."

It's a powerful change for consumers, and likely a good one for most. But it also means that buying a smartphone is about to become a lot more like buying (rather than leasing) a car: You can still probably take it to a dealership for a trade-in when the time comes for a new one, but you don't have to go back to the same place you originally bought it -- because you'll actually own it now.

Your next smartphone purchase is going to be a much more important investment than it ever was before. Choose wisely.