Why would you ever buy an unlocked iPhone?

Dwalls90

macrumors 601
Original poster
Feb 5, 2009
4,713
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At present, it costs minimally $650 (assuming we are talking about the current model of the iPhone) to buy an unlocked iPhone. But to buy a the equivalent iPhone under contract, it costs $200.

But look at this with the early termination fee considered:

Verizon: $200 + 350 (ETF) = $550
Sprint: $200 + $350 (ETF)= $550
AT&T: $200 + $325 (ETF) = $525

So, why would ANYONE buy the unlocked variant instead of just buying a locked phone and then canceling the contract immediately and saving at least $100! AT&T will unlock your phone after your contract expires, and I would assume that with LTE becoming the standard platform, other carriers may follow suit with the new iPhone. Did someone at Apple or the carriers not do the math here?
 

bengtc

macrumors regular
Oct 29, 2008
224
0
Why did you make this thread? Who cares what people do with their own money.
 

nitemare

macrumors regular
Jun 10, 2009
169
0
some ppl my not want to extend their contract for 1. 2 to get that pricing u either need to be eligible for a full sub upgrade pricing or add another line to your account. 3 some states charge sales tax on the full price of the phone not the sub price listed.

you can only use the AT&T iPhone on another GSM network in the US like T-moble once unlocked. the VZW and Sprint version can only be used on VZW or Sprint.
 

617aircav

Suspended
Jul 2, 2012
3,976
815
At present, it costs minimally $650 (assuming we are talking about the current model of the iPhone) to buy an unlocked iPhone. But to buy a the equivalent iPhone under contract, it costs $200.

But look at this with the early termination fee considered:

Verizon: $200 + 350 (ETF) = $550
Sprint: $200 + $350 (ETF)= $550
AT&T: $200 + $325 (ETF) = $525

So, why would ANYONE buy the unlocked variant instead of just buying a locked phone and then canceling the contract immediately and saving at least $100! AT&T will unlock your phone after your contract expires, and I would assume that with LTE becoming the standard platform, other carriers may follow suit with the new iPhone. Did someone at Apple or the carriers not do the math here?
You do not take into account the first months bill, activation fee.
 

jent

macrumors 6502a
Mar 31, 2010
697
147
The thread starter makes a good point so let's answer with the reasons why. For me, I'm never sure if they look at upgrade and cancellation history, so I wouldn't want to do it even if it were financially advantageous.

In this case, you are forgetting the state sales tax as well as the upgrade fee. If I'm not mistaken, all or most of the major carriers now charge a $36 upgrade fee. After that, the phone is still locked and you would have to contact the carrier for an authorized unlock.

Plus, after paying the ETF, what service would I use?

For me, it's just worth it to buy directly from Apple for full price and not have to worry about the carrier's involvement.
 

Frankied22

macrumors 68000
Nov 24, 2010
1,715
472
$45 a month for unlimited talk,text, and HSPA+ data with no contract. That's why. And it's the exact same coverage as AT&T.
 

mopatops

macrumors regular
Jul 21, 2011
159
32
UK
Correct me if I'm wrong but I believe in America you pay the same monthly fee regardless of whether you got the phone from Apple or the carrier?

In England we have 'sim only' contracts for people who already own a phone themselves. For example:

I buy an iPhone from Apple for £500 and then pay £10 per month for my sim only contract totalling £740 over a period of 24 months.

Compare that to paying £30 per month on a 24 month contract and £50 for the subsidised phone and you're looking at a total of £790 over the 24 months.

Another option would be to buy the phone from Apple and use a 'Pay as You Go' plan which costs my Mum ~£5 per month. Yes she doesn't get cellular internet for that but she's happy just connecting to our home wifi.
 

3rd Rock

macrumors 6502
Aug 10, 2012
459
1
Over here
For me it's a no brainer..

1. Unlocked $650.00 + $45.00 month for data = $1,730.00 2 yrs of usage, not mentioning fee's


2. Locked $200.00 + $45.00 month data + Activation = $1,316.00 two yr contract not mentioning fee's.


I'll take the 2 year contract from Verizon which I have been using for ever now :D
I won't be using unlimited, since I don't use music/movies/facebook stuff, and like the OP mentioned, I could over a short period of time just cancel the contract + pay the early termination fee, what ever that will be a few months later. I will still use Verizon since its the better of the others in my area
 
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Certinfy

macrumors 6502a
Jan 29, 2011
933
0
London
Yes, and i did with my iPhone 4S.

Mainly because in the UK iPhone contracts are FAR higher than every other phone and buying it outright works out a lot cheaper.
 

IO01

macrumors member
Oct 20, 2011
73
0
So, why would ANYONE buy the unlocked variant instead of just buying a locked phone and then canceling the contract immediately and saving at least $100!
Um, I bought my 4S unlocked (in the US) so that I could use it in S. Korea. (I've been spending my summers in S. Korea the past few years.) Dwalls90, did you not consider international use as a reason to buy an unlocked phone? :rolleyes:
 

jpiszcz

macrumors 6502
Mar 28, 2010
308
48
Unlocked iPhone 64GB 4S @ $849 + tax = $900

AT&T will subsidize the upgrade if you enter a new 2 year contract for price + $250 = $399 + $250 = $649 + tax = $681

Now, whether you want to stick with AT&T is your choice but its $219 cheaper not counting other fees if you want the 64GB model
 

tbayrgs

macrumors 604
Jul 5, 2009
6,553
3,481
At present, it costs minimally $650 (assuming we are talking about the current model of the iPhone) to buy an unlocked iPhone. But to buy a the equivalent iPhone under contract, it costs $200.

But look at this with the early termination fee considered:

Verizon: $200 + 350 (ETF) = $550
Sprint: $200 + $350 (ETF)= $550
AT&T: $200 + $325 (ETF) = $525

So, why would ANYONE buy the unlocked variant instead of just buying a locked phone and then canceling the contract immediately and saving at least $100! AT&T will unlock your phone after your contract expires, and I would assume that with LTE becoming the standard platform, other carriers may follow suit with the new iPhone. Did someone at Apple or the carriers not do the math here?
I think the OP was questioning why you'd pay more buying an unlocked phone rather than use his proposed workaround to also get an unlocked phone and save some cash, not why anyone would get an unlocked phone. Where he's mistaken, as many of you have pointed out, is that the US carriers require payment for the first month of service (approximately $75-80) and charge a $36 activation fee, thus eliminating his perceived savings.
 

cvaldes

macrumors 68040
Dec 14, 2006
3,237
0
somewhere else
First of all, there's a $36 activation/upgrade fee.

Also, you need to stay aboard at least one month. If you cancel your contract before the end of the first month, you will have to surrender the handset. So basically, you need to pay for at least one month's worth of service, let's say $60.

The sales tax issue that others have mentioned is irrelevant. At least here in California, you should be taxed on the full retail value of the handset, even if you bought it subsidized. If you buy the unlocked, unsubsidized handset, the tax should be about the same.

Plus there's the whole hassle of the credit check (if applicable), signing up for the contract, canceling the contract, and trying to get the carrier to unlock the device.

Doing it the other way is simple. Buy unlocked, unsubsidized handset from Apple, no questions asked. Buy Straight Talk SIM, no questions asked.

Note that the quoted postpaid contract plan price often does not include local taxes. For me, the $45 Straight Talk service plan only imposes an additional $0.94 in mandatory FCC access fees.

The best was when AT&T's GoPhone Pay As You Go SIMs still worked (with their Per Minute plan). No additional taxes whatsoever. All the taxes were built into the rates. Sadly, AT&T changed their GoPhone service and their Per-Minute Pay As You Go service is no longer a viable option for iPhones.

Hell, my PAYG SIMs were never registered with my info. I'd get the SIM for free at the local AT&T store and they'd just put the store address as the contact information ("GoPhone Customer" was the name). I'd buy the discounted refill cards at CallingMart so AT&T never got a credit card number from me.

If you don't want the cellphone company to know anything about you, that was the way to go.
 

aneftp

macrumors 601
Jul 28, 2007
4,255
468
This is exactly the reason all the major carriers raised their ETF to $325-350. We all remember te good ole days back in 2009-2010 when AT&T still had $175 ETF. Many savvy people took advantage of the $175 etf and simply just added a line and than canceled line ($199 plus $175 ETF plus activation fees). This came out to around $400 for new iPhone and it was simply much cheaper than paying the full $600 retail price for iPhone 3GS at that time (apple raised retail price of iPhone to $650 in April 2011).

Now with etf being well over $325-350 it makes very little sense trying to cancel the new line. Your cost savings are very little especially factorIng in AT&T makes u return phone if u try to cancel line immediately or be charged full price for phone.
 

Cueball7

macrumors newbie
Aug 11, 2012
2
0
You can't just cancel your contract straight away and keep the phone. Well you can't here in UK.
 

ipsychedelic

macrumors 6502a
Mar 8, 2012
633
22
Because I'm a millionaire.

And also because down here in South America... $200 bucks subsidized? Forget about it.
If I calculate the price 1 year, locked vs 1 year unlocked straight from the Apple Store (which is what I ended up buying), it's almost the same.
So, at any event NOT giving money to the stealing SoBs from my carrier company gives me satisfaction. (Apple are also stealing SoBs, I'm aware, but what can I do, I love their products, so...).
 

boss.king

macrumors 68040
Apr 8, 2009
3,240
56
I bought my 3GS unlocked because:
1. I was moving from country to country every few months.
2. All added up, it was cheaper than buying on a contract.
3. I don't like being tied into contracts, I often change services to get the best deals.
 

bigjnyc

macrumors 603
Apr 10, 2008
6,396
3,467
Even cheaper would be to buy the locked phone and then pay one of these websites that are doing unlocks about $50 to get a factory unlock for you. But then you'd still be under contract I guess.. So that wouldnt work if you wanted to go to another provider. Just if you wanted to use it overseas, or get higher resale value before your contract is up.
 

Dwalls90

macrumors 601
Original poster
Feb 5, 2009
4,713
1,083
It seems almost everyone missed the intention of the thread. Not, WHY you would buy an unlocked phone. But why one would buy an unlocked one versus buying one on AT&T and ETFing the contract so they could officially unlock it for you. I'm assuming a fair amount of repliers didn't realize AT&T now offers this service. Also, Paying the ETF doesn't ruin your credit, defaulting on the line would however (at which point if you cannot pay your phone bill you have bigger fish to fry than your credit score ...).

The rest of you do raise some other discussions points though concerning activation/upgrade fees and the first monthly bill. From what I understand, AT&T isn't strict on activation/upgrade fees. I have always had the activation/upgrade fee waived every year for the lines on my plan, so that's not necessarily a cost for all users. Furthermore, I guess I was thinking more in terms of a typical user's stand point, so they would be probably on a shared/family plan. This would lower their "first" bill to more of the ballpark of $25-$40 per line. The "master" line could easily be switched to the non-unlocked phone switcher, thus the hefty first month bill is easily avoidable.

Applying both of these facts, one would even still arrive at the $200+325+40 (assume most expensive scenario, unless you are on your own line) and that's still at $565, almost $100 cheaper than the unlocked phone. Even if you were flying solo, I was under the impression that AT&T's cheapest plan starts at $55 a month, so that's not much more than the $25-40 range.
 

thewitt

macrumors 68020
Sep 13, 2011
2,102
1,518
Because not everyone lives in the US where carrier choices are restricted.... I have several SIM cards for international travel purposes...and can only use an unlocked phone.
 

RenoG

macrumors 65816
Oct 7, 2010
1,269
52
Wirelessly posted

@ et iphonehome
Activation fee plus city tax
Your looking at $86.37
So
$100 from the presumed ETF savings minus $86.37 = $13.63

$13.63 give or take a dollar or two depending on you city tax rate. OP Is that really worth the hassle? NO!!
 

617aircav

Suspended
Jul 2, 2012
3,976
815
Wirelessly posted

@ et iphonehome
Activation fee plus city tax
Your looking at $86.37
So
$100 from the presumed ETF savings minus $86.37 = $13.63

$13.63 give or take a dollar or two depending on you city tax rate. OP Is that really worth the hassle? NO!!
Yep not woth the hassle
 

noodile

macrumors regular
Aug 4, 2012
139
0
Because if you buy it from ATT or whatever its LOCKEDDDD. and some people actually use their phones over sees through other carriers. Believe it or not, there are other countries in the world.
 

Mr Hill

macrumors 6502a
Apr 28, 2012
500
1
Charlotte, NC
People could be wanting to buy unlocked ones because they travel overseas and haven't been with their carrier long enough for them to unlock the phone for them.

Also some people still buy the factory unlocked phones so that they can use T-Mobile despite the 2G data speeds. There may be even more people buying them factory unlocked later this year if T-Mobile isn't an official launch carrier of the next iPhone but they have their iPhone compatible 4G network up.