Buying an iPhone in the US? Pay full price!
It doesn’t pay to get a contract, here’s why
If you’re in the US and you have decent T-Mobile coverage in your area you should pay full price for an unlocked phone.
If you’re anything like me, you probably use a smartphone mainly for data, not voice. If you have a typical monthly plan with a provider like AT&T or Verizon then you’re paying a crazy premium for voice.
T-Mobile has a fantastic “web only” pre-paid plan for $30 a month that favours data over voice. It includes 5 GB of 4G data, unlimited texts, and 100 minutes of voice.
The plan can be hard to find on their site but you can see it by going here and clicking “Which plan is right for you”. You can then select it when activating your phone.
How the numbers compare
For AT&T, you’re required to pick a voice plan (minimum $40) before you can select a data plan ($50 for 5GB/month). The T-Mobile plan is $60 cheaper (per month!!) and texts aren’t even included for AT&T.
For Verizon, it costs $110 to get a plan that provides 4GB of data. Verizon has much better coverage in the US so if they’re your only option, you have my sympathies. The pre-paid T-Mobile plan is a shocking $80 cheaper.
The discounted iPhone 5s (16GB) price is $200, the full price for an unlocked model is $650. So to save $450 by signing a contract with AT&T you’re going to spend ($60 * 12 months * 2 years =) $1440 more over your 2 year contract.
Dealing with voice on $30 plan
100 minutes is usually enough for me, especially since I try to use Google Talk to make free phone calls from my computer when I can.
T-Mobile allows you to pre-pay a minimum of $10 for any extra minutes, so that you don’t get cut-off when you go over the 100 minutes. It can automatically top it up at the end of the month if you drop below a certain amount. Using this feature, I get charged the extra $10 ever 2-3 months to top up this reserve. So in reality, I’m paying ~$35 a month.
One other alternative
If you don’t have good T-Mobile coverage, or you need unlimited voice, then consider the $45 per month plan from Straight Talk (it uses the AT&T network). It has unlimited voice + text and an undisclosed amount of “unlimited” data.
In the end
If you can’t afford $650 for a new iPhone but will pay $200, I seriously wonder how you can afford the crazy cell phone plans.
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