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When would I consider paying $450 more?

J

jmcrutch

macrumors regular
Original poster
Jul 27, 2010
249
79
I'm trying to understand why I would even consider paying the true price for the new iPhone 4S, which is $450 more than what you pay when agreeing to a new two-year contract, since the carrier subsidizes it.

I understand that the carrier recoups their "loss" over the two years, but I don't know of any other options, here in the U.S., that would make it financially better for me to buy the "unlocked" phone. As far as I know, I can't use the unlocked phone with a prepaid or PayGo plan . Or can I?

Answers that involve buying it to sell overseas are irrelevant to me. I'm only trying to understand why someone in the US, who is going to use the phone himself, on a US carrier, would pay the higher price.

Thanks to anyone who can help me understand this.
 
There is an iPhone tactic that is used almost every day. It's perfectly (well ok somewhat) legal but you have to want to walk around with some janked up phone for yourself. You already have an At&t line with some old phone you don't mind keeping for another two years. You order the latest iPhone on the day it launches. When it arrives, you list it on ebay and sell it. You don't cancel your service for the two years you just tacked on for that iPhone you just bought. Done.

Suffer through the continued use of your old phone while you enjoy the profits you made selling the nice new iPhone...
Brick+Phone.jpg
 
jmcrutch said:
I'm trying to understand why I would even consider paying the true price for the new iPhone 4S, which is $450 more than what you pay when agreeing to a new two-year contract, since the carrier subsidizes it.

I understand that the carrier recoups their "loss" over the two years, but I don't know of any other options, here in the U.S., that would make it financially better for me to buy the "unlocked" phone. As far as I know, I can't use the unlocked phone with a prepaid or PayGo plan . Or can I?

Answers that involve buying it to sell overseas are irrelevant to me. I'm only trying to understand why someone in the US, who is going to use the phone himself, on a US carrier, would pay the higher price.

Thanks to anyone who can help me understand this.
Click to expand...

To use on a network other than the regular carriers, outside of a contract, and with the ability to travel overseas and just pop in a prepaid sim card to use service.

I doubt you will come out ahead in most cases, but can we really put a price on freedom from contracts and freedom to roam about the world? I think not :)

Obviously, the carriers and Apple are hoping that you do put a price on freedom, that you will balk at the markup, and you will submit yourself to the power of US carriers. USA! USA!

Seriously, anyone who has been overseas for any length of time realizes how stifling the so-called "free market" in the US is. The lack of competition and options here is truly depressing.
 
jmcrutch said:
I'm trying to understand why I would even consider paying the true price for the new iPhone 4S, which is $450 more than what you pay when agreeing to a new two-year contract, since the carrier subsidizes it.

I understand that the carrier recoups their "loss" over the two years, but I don't know of any other options, here in the U.S., that would make it financially better for me to buy the "unlocked" phone. As far as I know, I can't use the unlocked phone with a prepaid or PayGo plan . Or can I?

Answers that involve buying it to sell overseas are irrelevant to me. I'm only trying to understand why someone in the US, who is going to use the phone himself, on a US carrier, would pay the higher price.

Thanks to anyone who can help me understand this.
Click to expand...

Of course you can use the unlocked phone with a prepaid or PayGo plan. What do you think "unlocked" implies? You can use it with any pre- or postpaid plan from any carrier in any country in the world :)

If you look at the options given by the different carriers and sum them up, how much would you end up paying during the two years? That's what you need to ask yourself, not how much you need to pay up front.
 
I don't think there is much financial incentive in the USA to buy unlocked. Here in the UK (and possibly other countries), if you buy the phone unsubsidised and unlocked, you can get a lower monthly contract cost so it makes more sense
 
T-Mobile USA has a $50/month plan that offers unlimited voice, texts, AND DATA. That's $1,200 for a comparable 2-year term. You simply have to provide the (i)phone. Plus, you have no contract so you can stop at any moment. Also, you can get whatever phone you want when you want it.

http://prepaid-phones.t-mobile.com/monthly-4g-plans
 
osx11 said:
T-Mobile USA has a $50/month plan that offers unlimited voice, texts, AND DATA. That's $1,200 for a comparable 2-year term. You simply have to provide the (i)phone. Plus, you have no contract so you can stop at any moment. Also, you can get whatever phone you want when you want it.

http://prepaid-phones.t-mobile.com/monthly-4g-plans
Click to expand...

According to https://www.macrumors.com/2011/10/0...-4s-service-plans-for-att-sprint-and-verizon/ the cheapest subsidized option is Sprint, at 2 400 USD over a two year period.

So 2 050 vs. 2 400. Saving 350 dollars and having all that freedom? I think we've answered the question in the topic ;)
 
Correct me if I'm wrong, but using the iPhone on T-Mobile relegates the user to 2G speed, does it not? I thought that T-Mobile's 3G network differed from that offered by the iPhone.

If I could understand better the various options that I could use an unlocked phone, in the same manner that I'm using it today (99% in the US), then I would definitely consider paying more upfront. But the options are harder to find (not as advertised).

Thanks for the replies.
 
jmcrutch said:
Correct me if I'm wrong, but using the iPhone on T-Mobile relegates the user to 2G speed, does it not? I thought that T-Mobile's 3G network differed from that offered by the iPhone.

If I could understand better the various options that I could use an unlocked phone, in the same manner that I'm using it today (99% in the US), then I would definitely consider paying more upfront. But the options are harder to find (not as advertised).

Thanks for the replies.
Click to expand...

I guess you have a pretty good idea of which carriers you have access to where you live? Just go to their web pages and see what they offer :)
 
jmcrutch said:
Correct me if I'm wrong, but using the iPhone on T-Mobile relegates the user to 2G speed, does it not? I thought that T-Mobile's 3G network differed from that offered by the iPhone.

If I could understand better the various options that I could use an unlocked phone, in the same manner that I'm using it today (99% in the US), then I would definitely consider paying more upfront. But the options are harder to find (not as advertised).

Thanks for the replies.
Click to expand...

This is the iPhone 4S. It works at 1800mhz which was the limiting factor for previous iPhones as T-Mobile uses 900mhz and 1800mhz for it's 3G network while AT&T uses 900/1900. So theoretically the iPhone 4S should get full speed now. I don't know if this is confirmed yet but I am sure someone we will find out soon enough.

Though I'll stick with 2G speeds on my 3GS. $750 plus higher monthly fees just is not worth it when all I really ever do on the thing is an occasional map, checking e-mail, sms, voice and read. The rare times I actually go on the web is at home in which 3G could not compete with my cable modem.
 
velocityg4 said:
This is the iPhone 4S. It works at 1800mhz which was the limiting factor for previous iPhones as T-Mobile uses 900mhz and 1800mhz for it's 3G network while AT&T uses 900/1900.
Click to expand...

I don't think that's accurate.

The iPhone supports the 1800MHz and 1900MHz bands; 1800MHz is used by most of the world, and 1900MHz is the "PCS" band used in the USA.

Tmobile USA uses an odd 1700MHz band for 3G/HSDPA
http://en.wikipedia.org/wiki/T-Mobile_USA#Radio_frequency_spectrum_chart
It's the only carrier in the world that uses that band.
 
hafr said:
Of course you can use the unlocked phone with a prepaid or PayGo plan. What do you think "unlocked" implies? You can use it with any pre- or postpaid plan from any carrier in any country in the world :)
front.
Click to expand...

is this really true? If so, this is what I plan to do. I pay about $10-15/month on a pay as you go plan. Combine this with the most basic data plan from ATT of $15/mo and I would only have to pay maybe $25/mo, especially when I can use VoIP to make most calls. I could recoup the cost of the phone in less than a year at worst. Oh Happy Day if this is true!
 
SHirsch999 said:
is this really true? If so, this is what I plan to do. I pay about $10-15/month on a pay as you go plan. Combine this with the most basic data plan from ATT of $15/mo and I would only have to pay maybe $25/mo, especially when I can use VoIP to make most calls. I could recoup the cost of the phone in less than a year at worst. Oh Happy Day if this is true!
Click to expand...

Is it really true? Call AT&T before you do this. I think that they will not hook up an iPhone on anything but an iPhone plan.
 
nastebu said:
Is it really true? Call AT&T before you do this. I think that they will not hook up an iPhone on anything but an iPhone plan.
Click to expand...

^^ and thus my continued confusion. If you buy an unlocked phone from Apple for the extra $450 in the U.S. ... AND you plan to use it in THE U.S. for texting, phone calls, and data, then are you stuck with just using it on T-Mobile's 2G Edge network. There doesn't seem to be a consensus on this.

In a rationale world, AT&T would offer two different sets of rate plans ... one for buying the phone under contract, and another if you buy it unsubsidized. But, this doesn't seem to be the case.

So, I still can't really see why I would consider buying it for full price.
 
hm, i am stuck in this case as well.
i stay in the states for the next 6 month. so i plan on getting the iPhone unlocked. but if tmobile really is that slow, i have to think of another carrier.
 
jmcrutch said:
^^ and thus my continued confusion. If you buy an unlocked phone from Apple for the extra $450 in the U.S. ... AND you plan to use it in THE U.S. for texting, phone calls, and data, then are you stuck with just using it on T-Mobile's 2G Edge network. There doesn't seem to be a consensus on this.

In a rationale world, AT&T would offer two different sets of rate plans ... one for buying the phone under contract, and another if you buy it unsubsidized. But, this doesn't seem to be the case.

So, I still can't really see why I would consider buying it for full price.
Click to expand...

It's not really an "iPhone plan" any more. Any smartphone has to have a data plan that costs at least $15. At&t offers a much better price point than Verizon's lowest smartphone data tier which would be $30. I believe you could walk in and buy an iPhone, then switch to some dumb phone and sell your iPhone and you would only be liable for the data plan if your iPhone was actually being used on your line. Keep your line for 2 years using some sort of feature phone and you wouldn't have to pay for data. I'm sure this is where a lot of those ebay iPhones come from. There are some people who would not mind paying $199 for an iPhone and selling it for $600 or more and for that kind of money they don't mind walking around with a 3 year old feature phone while they wait for their next upgrade cycle.
 
so, i just checked on at&t:

what about a unlocked phone (450$ more than locked) with pay as you go unlimited for 50$ a month? that sounds good to me. has no two year contract and is as cheap as tmobile, but with real 3g?! or am i wrong? I'm so confused that there a so few plans :D
 
AT&T prepaid data is blocked on the iPhone. Voice and messaging work, but data is blocked.

That said, I'm waiting for the unlocked version myself. I travel abroad a couple times a year and every time I end up buying 2 iPhones (one AT&T and then the other one abroad); waiting for the unlocked one makes more sense now that it's an option in the US.

Anyways, I'm fine with AT&T, but the flexibility of being able to use a local SIM is very useful.

And some people just don't feel like signing contracts for everything. My parents are like that (or at least they used to be…)
 
So, if I'm understanding what people are saying, if a person wants to buy the Unlocked phone from Apple then use it with Full functionality on AT&T's network, they will still be paying the full service price, i.e., they are paying the same amount as someone who buys the phone subsidized.

So, other than being able to use it when traveling abroad without paying AT&T's overseas rates, how's spending an extra $450 worth it?

I'm a pretty smart guy but this one confounds me.
 
jmcrutch said:
So, other than being able to use it when traveling abroad without paying AT&T's overseas rates, how's spending an extra $450 worth it?
Click to expand...

for me its worth it: i will leave the us in 7 month. so i have to get rid of my contract anyway... --> price with termination fee 750$ plus ca 30 dollar per month more than i would pay at tmobile is more than the 850$ i would pay for the unlocked phone and the att-phone isn't even unlocked.

how do they know about iPhone usage on a prepaid phone? they never see the phone. and who would buy "unlimited data" without a smartphone? that doesn't make much sense to me!?
 
nastebu said:
Is it really true? Call AT&T before you do this. I think that they will not hook up an iPhone on anything but an iPhone plan.
Click to expand...

You mean that there is a possibility that you can't use an iPhone with AT&T without having a specific plan for the iPhone? If that's true, the telecom market in the states is more messed up than I thought, and I feel sorry for you guys...
 
jmcrutch said:
So, if I'm understanding what people are saying, if a person wants to buy the Unlocked phone from Apple then use it with Full functionality on AT&T's network, they will still be paying the full service price, i.e., they are paying the same amount as someone who buys the phone subsidized.

So, other than being able to use it when traveling abroad without paying AT&T's overseas rates, how's spending an extra $450 worth it?

I'm a pretty smart guy but this one confounds me.
Click to expand...

"Is it worth it" is different for everyone. It's worth it to me doesn't mean it has to make sense to someone else. Just like I spent the $250 for the CPU upgrade on my MacBook Pro cuts a few minutes time here and there, doesn't really make sense to most people, but to me those few minutes here and there add up to the difference between get a 4 hour nap and make actually being rested in 5 hours.

My usual tip to folks if you have ask if you need it, you probably don't.

chillhase said:
how do they know about iPhone usage on a prepaid phone? they never see the phone. and who would buy "unlimited data" without a smartphone? that doesn't make much sense to me!?
Click to expand...

The moment you put that SIM in the iPhone they know because the phone sends an identifier message to AT&T telling them it's an iPhone (so to enabled visual voicemail, etc.)
 
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