“Looking to save hundreds of dollars on a new iPhone?” Brett Arends writes for MarketWatch. “It’s actually very easy. So easy, in fact, that it’s weird so many people are paying through the nose instead.”
“Don’t buy a subsidized iPhone with a two-year contract with AT&T or Verizon or Sprint or T-Mobile. Instead, buy an iPhone from Apple completely ‘unlocked,’ meaning it comes without any cellular contract and you have to go find a cellular provider on your own,” Arends writes. “Then, sign up with one of the inexpensive ‘mobile virtual network operators,’ cut-price networks which simply resell airtime on the major networks at a discount.”
“The savings from this maneuver can be immense,” Arends writes. “When you add it all up you may save $700 or more over two years.”
Read more in the full article here.
I’d say fire up a spreadsheet and do the calculations, because a carrier can be cheaper depending where you live.
For instance, where I live you don’t pay anything upfront for an iPhone on a plan. So crunching the numbers, plans often work out as the better option.
One of the trickiest considerations is that an iPhone outright is an expensive purchase. Carrier contracts do a lot to hide that cost, even though you may be getting less value.
> When you add it all up you may save $700 or more over two years.
Unfortunately, many consumers can’t think that far ahead… All they see is the “$700 or more” that it will cost them up front.
Well, yeah. For a lot of consumers, that’s the more important number. It’s not easy to say to yourself: “Okay, I’m going to be $700 in the hole to start off, but by rigorously saving what I don’t spend on cellular bills, in two years, I’ll be a couple hundred dollars ahead!” What if something happens in the middle of that period when you might need the money?
——RM
How to save money? Yeah, don’t buy an iPhone!!
Go to some other board!
Oh why? I like it hear.
*here!
Uhm, sure, troll. Why buy a Fluke 62 MAX+ infrared thermometer for $89 when you can buy a$19.99 model from Harbor Freight tools? You know… on the assumption that the cheaper one *designed* by a copycat is just as good.
And thank you for your cogent argument, Feather. Isn’t it just wonderful how the Internet gives 9th graders a voice?
Yes, a 26 year old 9th grader.
25½ actually.
And it’s wonderful that MDN allows it too!
I, too, prefer two soup cans and some kite string, but I have a devil of a time getting my email on them! I don’t know which gives me more trouble, Progresso or Campbell’s…
In my area the cut-rate networks buy bandwidth from T-Mobile or Sprint, both of which have spotty coverage.
Is Verizon available in your area. If so, check out Page Plus Cellular. I’ve been using them for a year, saving as much as $60/month.
AirVoice Wireless uses the AT&T network.
Read over the ToS on all of these carriers. I just went over to AirVoice’s website and found this:
“To prevent fraudulent activity on [each] plan, you will receive [half] of data at the time that you add your refill card. Once you complete [that] data, you must contact customer service at 1-888-944-2355 to apply the other [half] to your account.” Talk about inconvenient.
And then there was this whopper:
“When using Wi-Fi, you will need to turn OFF your Cellular Data Network Setting on your handset. If you do not turn off the cellular data network setting on your handset, you will be charged for internet usage even if you are using Wi-Fi because it will still be considered Cellular Data Usage.” How do they think they can do that?
I don’t mind the two-year contracts. The lower upfront costs of the phones make them an easier purchase and now that the carriers will be legally required to unlock the phones from their networks upon request following the contract, resale prices may go up a bit.
So basically, look at the options and go for the one that has the combination of features and price that suits you.
I just compared my ATT 2gig plan to Cricket wireless.
It would cost me an extra $450 for the phone over the contract prices and I would save about $480 on the service (although I would get 1gig more per month that I won’t use)
With ATTs new lower prices, it doesn’t make a lot of sense for me
Except AT&T’s new pricing doesn’t include the phone. You supply a phone and it costs you $10/mo to add it to the plan (assuming a family plan). That said, AT&T works best for me. It costs me under $200 to get 40 GB (thank you for doubling the data, AT&T) for five phones, two iPads, and a wifi hotspot. Might be able to do better with another carrier, but I travel all over the US and AT&T’s reach is important to me.
The last few years i buy the latest iPhone directly from Apple and get a super cheap sim only contract. When the new iPhone comes out I sell the old one before the price drops.
It works much cheaper in my opinion and i don’t feel tied into a 2 year contract!
Misleading story, I think. I’m not here to defend AT&T or VZ… I’ve been with and had my troubles with both. But I have several friends and family on a Mobile Share Plan with AT&T. Within that group, I’m on the Next plan, which costs me $32.65 per month for just the service, including taxes and fees, (unlimited talk/text, 3gb data per person), in addition the cost of my new iPhone 6 Plus, which is divided over the next 24 months, with no interest. Even if I paid for the phone up front, my bill would still be just $32.65. So why not take advantage of financing the phone for 2 years at 0% interest? I don’t know if this guy just didn’t do his homework, or he’s just on an anti-AT&T/VZ/etc. rant. Or am I just reading his story wrong?
I, too, us the Mobile Share plan. The issue with the Next plan is that you’re leasing the phone, not making installments — so no residual value to you when you switch to another phone. And that’s the question: do you enjoy selling your previous phone when you “upgrade” to the newest?
Not exactly correct. You’re only “leasing” the phone if you upgrade to another phone before the current phone is paid off. If you keep the phone until it’s paid off, you own it.
Thank you! I found the fine print where it does in fact say: “Upgrade requires… trade-in of current financed device…” So once it’s paid off, you only have to buy a new phone. More formulae for the spreadsheet, me thinks! 🙂
Spreadsheets or the numbers are mostly smoke and mirrors.
Page Plus Cellular. Uses the Verizon network. I was using an iPhone 4s on their $12/month plan, now I’ve upgraded to a 5s, on the $30/month plan.
When I was with Verizon, I paid $72/month, and that was after a 19% employer discount.
Consumer Cellular is similar on the GSM side of the street. And now they sell unlocked iPhone 6 and 6 Plus interest free over 22 months for just $25 a month after just $100, $200, $300 or $400 down depending on your model preference. Service can be as low as $12 a month if you’re AARP enabled and magicJack savvy. However, they still don’t have any 64 or 128GB models in stock to sell yet. So patience is required to get on their bus. 😜
“AT&T Mobility will restrict the maximum download speeds available to its new Cricket prepaid customers to 8 Mbps on LTE devices and 4 Mbps on HSPA+ devices.”
http://www.fiercewireless.com/story/att-caps-crickets-peak-download-speeds-8-mbps-lte-4-mbps-hspa/2014-05-20
So I get slower capped speeds switching to a 3rd party no contract wireless plan.
Cricket Vs AT&T I would save an overall $15/month (rounded up) ($360 over the 2 years) and get second rate service.
I get almost twice that with my AT&T service (11-15, it varies) and Verizon here gets about 10-12Mbps max.
AT&T has spent a ton of time/money upgrading the LTE around here, Verizon.. not so much.
2-3 years ago.. lucky to get 5 Mbps.
BTW, nobody EVER discusses the DISCOUNTS you can qualify from all major carriers for being a member or employee of many companies.
I get a 24% discount on service JUST cause of my employer.. 50% on Accessories.
I don’t get either of those discounts with say Cricket.. As far As I know only AT&T/Verizon/Sprint/T-Mobile offer those discounts.
For example if you as a AARP member.. walk into your cellular provider and ask about your discount that you can apply to your account. They have a very large list of participating groups/companies.
Condensed story version:
I got my iPad Air 2 monday from the local Apple Store, went to my AT&T store and got the $40 activation fee waived, and a $100 credit on my account. All cause AT&T’s policy wouldn’t let me use my $200 credit (for selling my iPhone 5 to them after I got my 6) to *order* a 128gb iPad like i had planned.
Now I have the 5gb plan for roughly $37/month (essentially free for the next 8 months with my $300 credit 😉 )
What 3rd party carrier does that?
Makes no sense at all. That’s $500 more, or $41.67 more per month for one year. My AT&T bill is $180 a month for two iPhones with unlimited data, a $10 line, and an iPad with 4GB data. So for just the iPhones they are about $60 each. Even if you can get unlimited data with the same high quality LTE and service availability and reliability as AT&T, you would have to be paying only $20 a month just to break even! How the hell is this saving tons of money? Fucking dumbass…
Not to mention I sell my iPhone to gazelle every year and get more than my money back, they give me more than I originally paid for it, so it actually already costs me nothing and I make $30 on average out of the deal.
Exactly.
Last year I didn’t buy the iPhone 5S, but I normally sell my old iPhone for as much as I paid for it on contract.
Every year AT&T lets me out of the 2 year if I get the new iPhone.
Except last year.. I still could have and paid $100 more for the 5S but didn’t just cause AT&T ticked me off.
I just use the upgrade from the extra $10 line for annual upgrades if I’m not able to get out of the contract.
you’re not saving on the phone, you’re just buying a cheaper call/data package. In the UK the two elements of you tarrif are shown separately. So the providers are giving you the phone immediately – sometimes without a separate payment and then, instead of charging interest on the loan are accepting the call/data agreement as the way to make their money ( plus all the charges for services not bundled in the pckage).
That said, if like me you dont make a lot of calls then paying for the phone and buying a very small data package may prove much cheaper than paying monthly for something younhardly ever use.
The 3 network offer a PAYG deal which costs 3p per minute, 2p per text and 1p per MB. With no monthly expiry, so, if you dont use it much, this is a great deal
For people who want to spend the money: fine. For people who value the convenience of full carrier plans: I get that, too. But there are a lot of people who may be paying too much for their cell phone service, but are seduced into doing so rather than making a clearly rational decision.
The journalist’s point is a good one, and the general issue of what-you-get-for-what-you-pay under alternative plans for buying a cellphone and service merits far more attention that it has been given. Many consumers might be perfectly happy with a less-expensive service, and would be better off putting the difference into savings for education or retirement, or whatever …than giving their money to the phone companies.
Also, I understand a lot of Android phones are bought under the perception they are cheaper than iPhones, so it may help a lot of people buy iPhones if they realize they can do so and pay less money than they realize.
Lastly, it all depends on people’s needs. I pretty much just use my iPhone for phone calls and some very basic cellular data service when I am away from Wi-Fi (at home, at the office, and at many other locations). I have experimented with $10 per month basic service from AIRVOICE Wireless (which uses the AT&T network and, who knows, might even be owned by AT&T ? ). Works fine for my needs. Right now, I am also happy to use older iPhone “hand me downs” from my wife and daughter, so basically my device is free.
Some people may be able to save a lot of money by buying an iPhone outright and buying the least expensive monthly phone and/or data cellular service that meets their needs. (Very inexpensive used previous models are also available.) This might include students, young people, and families with tight budgets. And don’t forget that the savings will continue for as many years as you do this, so the savings over 10 years or more (compared with buying full-service carrier contract plans) could accumulate to substantial amounts.
An added benefit is that if you buy your — GSM network compatible (ie, AT&T) — iPhone outright, it is not locked to a carrier, so when you travel to Europe or Asia, you can buy a cheap local SIM card and use your phone for local service (you would get a different, local, phone number); then just pop your regular SIM card back in your phone when you get home to the US. Easy-peasy.
There should be more discussion and publicly-available data on the exact costs and benefits of various iPhone service plan alternatives. I see no reason why this should be a big secret. The Airvoice Wireless service I bought was very confusing to switch. Almost like you need to know the “secret handshake”. But this is what the main carriers want, I think.
It is in the public interest to see more articles describing cheaper, alternate device purchase plans and phone carrier service plans. It could help a lot of people. Even though it may be totally irrelevant to others.
When you pay back using a 2-year plan, you pay much more in taxes (at least in the USA) than if you just bought the iPhone outright.
Not in Delaware. When I buy a phone for $199 with a two year contract I pay only $199 and not a penny more. Just drive to Delaware for your upgrade if you’re close by.