AT&T's "commitment free" price for the 16GB 3GS is $549, with a $599 price for the 16GB iPhone 4.
Although I'm guessing there's still some carrier subsidy hidden in that price since commitment free != unlocked, and even if that phone is sold on eBay it's guaranteed to only generate revenue for AT&T and nobody else.
Apple's move, however, will force the carriers to compete for the business of customers with unlocked iPhones, possibly even on a monthly basis.
I don't buy that somehow. They are pretty expensive (at least here anyway) compared to the currently subsidized prices. Currently I see no real benefit of not getting a contract device for 18 months then getting the free upgrade.
Customers will only need to buy a Subscriber Identity Module (SIM) or micro-SIM, which typically sell for about $10, to switch to a different carrier.
What about data costs? I know you couldn't do that here because internet access costs would crucify you quickly.
It's still good to know how the things go this year, anyway.
Especially for the folks who haven't been following the situation all along and/or live in very different parts of the world.
For comparison: here in Russia 3GS now officially costs $961/1122 (29990/34990 RUB) for 16/32 GB. It launched in March [sic] I doubt that they will sell any significant amount; seems like a dead end for the operators.
I don’t know much about the price structure in the US but in Germany there are cheaper options if you buy just the SIM. That phone must be payed somehow, that’s why you pay more every month when you have a subsidized phone.
Now, that in itself wouldn’t be so bad, but your choices are seriously limited with a iPhone. What if I don’t need hundreds of minutes but want a real data flat rate? That’s not possible with an iPhone.
And you can’t just pop in some cheapo prepaid SIM when traveling, you are forced to shoulder the roaming costs. That’s maybe not so important in the US but seriously sucks in Europe.
Since the costs are the same – either higher monthly costs and a subsidized phone or lower monthly costs and a unsubsidized phone – I would always rather buy the unsubsidized phone.
What if I don’t need hundreds of minutes but want a real data flat rate? That’s not possible with an iPhone.
Wow, yeh. I just checked into this and it seems in the UK, on O2, we get a great deal - basically "free internet" data for a 18 months (then you can get a free upgrade).
Since the costs are the same
Not sure that's true, depending on your needs. The unsubsidized phone + lower monthly cost + phone bill would be much larger for me than the current contract I have.
Agreed, though, it would be nice to be able to pop in a foreign SIM when abroad (I actually have a SIM free bog standard phone for this exact reason)
If you've had your iPhone more than 12 months then 02 will unlock it for you if you fill in the form on their website, then you'll be able to use local sims while abroad and shift to month-to-month sim-only deals on any network once your fixed term contract runs out.
You keep mentioning "free" upgrades. Do you just mean that you don't need to pay for the phone up front and instead (re)-sign an 18 or 24 month contract with minimum monthly payments? It's not really free, it's just like paying off your phone in installments. I saved money by paying more than the minimum necessary for my iPhone and paying a lower price each month than the minimum I'd pay to get the phone for "free". Even if it worked out cheaper in theory, you're locked into that price for 18 months. Now I'm out my contract my monthly cost is halved but the number of free minutes I got for that money quadrupled. I could get an even better deal if I switched carriers, but I can't be bothered.
Although this is great for consumer choice, I shudder when I think of all the corporate heads at telecom companies thinking of how to screw customers on this. The phone becomes a sunk cost and companies can then screw us on a higher go-forward price for their service. This is especially true in Canada where the industry is practically a duopoly.
Things are actually starting to get better. There was some spectrum auctioned last year and recently a number of start-up carriers are starting to pop up. The government also lifted some foreign ownership limits on the carriers. Give it a few years for people's contracts to end and we should have a healthy telecom market.
Has anyone ever tried to model the benefits of going with an unlocked, contract free phone over one tied to a specific carrier with a fixed contract?
I know that a lot of people, here in particularl, find the notion of locked down hardware repugnant, but from a cost/benefit perspective, I have just not seen that much of a problem, personally. I mean, are there usage scenarios with an assumption that you will have continuous approximate service (for the purposes of the iPhone, that would be a voice and data plan) that are common where carrier lock-in is very costly?
This is just wild massing guessing on my part, but without vendor/hardware lock-in, wouldn't competition (and therefore service) be much better? As of now, there's several prohibitive costs to switching services due to having contract cancellation fees, requiring a new phone, not necessarily being able to transfer your data, etc. With an unlocked phone, you'd still have those contract cancellation fees, but it would be a much smoother process to switch. If it was easy enough to change to another carrier, carriers would most likely focus more on being more attractive than their competitors to try to entice customers to them. As it stands, it seems to me like few people would actually bother switching unless they were grossly unhappy with their service.
However, I'll freely admit that I don't necessarily have data or experience to back this up. Am I on the right track here, or babbling aimlessly?
It seems that the elements are in place for some real competition in Canada:
- all the major carriers support the iPhone
- Apple is selling unlocked phones
- you can get a voice/data plan without a contract if you have an unlocked phone
- phone number portability works well
I think it's possible to get unlocked Blackberry and Android phones too, but not sure. It's too early to tell if this will lead to lower prices and better service, but I'm optimistic.
For me personally, it's worked out a lot cheaper. I got an unlocked iPhone 3G for ~€510 (inc VAT) and have been using it with a prepaid data SIM. Total cost of data over a year has been about €20-25. I happen to use another phone for voice, and I pay ~€2/month on average for that.
Extrapolated over 2 years: ~€610. (+ €60 for the second phone if you must include it)
The best iPhone tariff at the time was €35/month for 2 years - €840.
Added bonuses:
- I don't have to pay exorbitant data roaming charges when abroad, as I can just swap in a local SIM and have done so in South Africa, UK and Spain. (this is the reason I use a separate SIM+phone for voice)
- iPhone is exclusive to Orange & T-Mobile in Austria, the 2 worst networks for 3G. (this isn't much of an issue as "worst" here is still pretty good compared to most countries)
- ability to resell or otherwise pass it on (obviously)
This isn't strictly a comparison of the same phone with a contract and without, since it's compared to the nexus one without a contract, but a more detailed search will turn up some (some have been posted here on hacker news).
Other than what's outlined in that comparison, what other benefits are you thinking of? It mainly comes down to price, and often the total cost to the consumer over the length of the contract is more when the phone is subsidized vs when there is no contract. There's a perception that the the subsidized price is cheaper (just like how government subsidized student loans are cheaper because the government initially "pays" the interest), but I think often the phone is just being paid for in installments in each monthly bill during the contract.
I don't really see a big plus for this, we have 4 big GSM providers Rogers, Telus, Bell, and Wind Mobile.
Wind Mobile works off a different spectrum so that doesn't help. Rogers, Telus, and Bell all have almost the exact same plans for the iPhone and if you don't buy the iPhone from them the monthly cost is usually higher not cheaper.
Interesting. Here in eastern europe, unlocked has always been the 'usual' way. Even now, telecos generally go for partnerships with established retailers rather than opening their own chains. Buying a subsidized phone is more of a "I'm already using operator X, might as well get the device cheaper" kind of deal.
Good stuff. I had my iPhone stolen a few months ago and I had to buy a replacement through my service provider (Rogers) as Apple wasn't selling them unlocked at the time. I think, if anything, this will help dispel the feeling I had at the time that I was getting screwed by my provider for the replacement phone cost even if it's actually not the case.
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[ 2.7 ms ] story [ 61.2 ms ] threadDespite how it sounds, this isn't anything new. They've been doing this for some time.
Edit: I should point out, I believe we also got the iPhone care thingy from Apple as well. Which makes more sense.
Although I'm guessing there's still some carrier subsidy hidden in that price since commitment free != unlocked, and even if that phone is sold on eBay it's guaranteed to only generate revenue for AT&T and nobody else.
Apple's move, however, will force the carriers to compete for the business of customers with unlocked iPhones, possibly even on a monthly basis.
I don't buy that somehow. They are pretty expensive (at least here anyway) compared to the currently subsidized prices. Currently I see no real benefit of not getting a contract device for 18 months then getting the free upgrade.
Customers will only need to buy a Subscriber Identity Module (SIM) or micro-SIM, which typically sell for about $10, to switch to a different carrier.
What about data costs? I know you couldn't do that here because internet access costs would crucify you quickly.
No. They've been doing this for a while. Not sure why it's news now.
Especially for the folks who haven't been following the situation all along and/or live in very different parts of the world.
For comparison: here in Russia 3GS now officially costs $961/1122 (29990/34990 RUB) for 16/32 GB. It launched in March [sic] I doubt that they will sell any significant amount; seems like a dead end for the operators.
I don’t know much about the price structure in the US but in Germany there are cheaper options if you buy just the SIM. That phone must be payed somehow, that’s why you pay more every month when you have a subsidized phone.
Now, that in itself wouldn’t be so bad, but your choices are seriously limited with a iPhone. What if I don’t need hundreds of minutes but want a real data flat rate? That’s not possible with an iPhone.
And you can’t just pop in some cheapo prepaid SIM when traveling, you are forced to shoulder the roaming costs. That’s maybe not so important in the US but seriously sucks in Europe.
Since the costs are the same – either higher monthly costs and a subsidized phone or lower monthly costs and a unsubsidized phone – I would always rather buy the unsubsidized phone.
Wow, yeh. I just checked into this and it seems in the UK, on O2, we get a great deal - basically "free internet" data for a 18 months (then you can get a free upgrade).
Since the costs are the same
Not sure that's true, depending on your needs. The unsubsidized phone + lower monthly cost + phone bill would be much larger for me than the current contract I have.
Agreed, though, it would be nice to be able to pop in a foreign SIM when abroad (I actually have a SIM free bog standard phone for this exact reason)
You keep mentioning "free" upgrades. Do you just mean that you don't need to pay for the phone up front and instead (re)-sign an 18 or 24 month contract with minimum monthly payments? It's not really free, it's just like paying off your phone in installments. I saved money by paying more than the minimum necessary for my iPhone and paying a lower price each month than the minimum I'd pay to get the phone for "free". Even if it worked out cheaper in theory, you're locked into that price for 18 months. Now I'm out my contract my monthly cost is halved but the number of free minutes I got for that money quadrupled. I could get an even better deal if I switched carriers, but I can't be bothered.
It was something like $2500 total over 24 months, vs. $1700 when buying it outright and going on a cheaper contract.
You'd think more people could do basic math and think past the "first hit is $99" bait-and-switch...
Also: Vodafone in NZ does not do free upgrades for contract users, begging the question of the point of a contract.
I know that a lot of people, here in particularl, find the notion of locked down hardware repugnant, but from a cost/benefit perspective, I have just not seen that much of a problem, personally. I mean, are there usage scenarios with an assumption that you will have continuous approximate service (for the purposes of the iPhone, that would be a voice and data plan) that are common where carrier lock-in is very costly?
However, I'll freely admit that I don't necessarily have data or experience to back this up. Am I on the right track here, or babbling aimlessly?
I bought an unlocked iPhone 3GS in January and paid a premium, but I will probably sell it this summer, if I can get an unlocked iPhone 4G.
Extrapolated over 2 years: ~€610. (+ €60 for the second phone if you must include it)
The best iPhone tariff at the time was €35/month for 2 years - €840.
Added bonuses:
- I don't have to pay exorbitant data roaming charges when abroad, as I can just swap in a local SIM and have done so in South Africa, UK and Spain. (this is the reason I use a separate SIM+phone for voice)
- iPhone is exclusive to Orange & T-Mobile in Austria, the 2 worst networks for 3G. (this isn't much of an issue as "worst" here is still pretty good compared to most countries)
- ability to resell or otherwise pass it on (obviously)
- I can freely move country (it happens)
- I can tariff-hop
This isn't strictly a comparison of the same phone with a contract and without, since it's compared to the nexus one without a contract, but a more detailed search will turn up some (some have been posted here on hacker news).
Other than what's outlined in that comparison, what other benefits are you thinking of? It mainly comes down to price, and often the total cost to the consumer over the length of the contract is more when the phone is subsidized vs when there is no contract. There's a perception that the the subsidized price is cheaper (just like how government subsidized student loans are cheaper because the government initially "pays" the interest), but I think often the phone is just being paid for in installments in each monthly bill during the contract.
Wind Mobile works off a different spectrum so that doesn't help. Rogers, Telus, and Bell all have almost the exact same plans for the iPhone and if you don't buy the iPhone from them the monthly cost is usually higher not cheaper.