You know the routine … your two-year agreement is up, and you now are able to buy a new phone. And to convince you to stay, your provider of choice will sell you that new phone at a considerable discount, or so they say. So now that $700 iPhone can be had for $200 out of your pocket.
Well, at least that’s how it used to be.
Providers are moving away from phone subsidies, and are now giving you options like a payment plan to pay off your phone. So take that same $700 phone, and just put down a “down payment” and the remaining balance will be divided over the life of your contract. Or, if you want, you can just pay off the balance. $700 later, the phone is all yours to do whatever you want with it. And who’s to say that future iPhones or Samsung Galaxy Notes won’t cost more?
But let me ask you a question … is an iPhone really worth $700? Even to a gadget junkie like me the idea of spending THAT much on a phone is not something I enjoy the thought of. And realistically, even when the phone is subsidized the price of the phone is built into your monthly bill. When in theory that $700 is paid, your bill isn’t going to go down. You’ll pay for that phone every time you pay your bill, even AFTER your contract has expired. Yeah … they get you coming and going.
Of course, you don’t HAVE to spend that much; there are people selling their old phones all the time. So when the iPhone 6 is released, there will be a flood of iPhone 5’s available to grab off of places like eBay and Craig’s List, assuming you don’t mind not having the newest device. Still, unless you’re fortunate you probably won’t find a newer one for $200.
But what if I told you that you could get a phone for, say, $350? Is a new phone worth that much? Even better, what if I told you that you won’t have to deal with subsidies, you won’t have to sign a new contract, and the phone is not only new, but as far as specs go is not that far from the ones that cost $600 – $700?
No, this isn’t an ad or an infomercial. There are companies that have decided that phones cost too much, and that carriers are ripping off their customers. So you can buy the phone directly from them for prices starting around $300. A company called OnePlus has announced a phone that has a 5.5- inch screen for $299. And this phone is no slouch; 2.5 GHZ processor, 3 GB of RAM, 13 MP camera … its right up there with the big boys like the Galaxy S5 and the iPhone. The Google’s Nexus 5 is based off of an LG phone, and you can buy it directly from Google starting at $349. The Motorola X can be purchased directly from Motorola for the same price and the Motorola G even less than that, around $179. That’s right … a brand new VERY good phone without the subsidy BS for LESS than a new phone subsidized. Don’t have $179? Well then how about $129. Motorola announced a new phone, the Moto E that costs $129. With no contract. Let me say that again … One Hundred and Twenty Nine Dollars. Brand new.
These are all Android phones, so if Android isn’t your thing, then you’re stuck with getting it used or from the carrier, getting an iPhone from someone who wants to get rid of theirs or waiting a couple of years and maybe the older ones will be less expensive. Depends on how cutting-edge you need to be, and how disposable your disposable income is. I hope at some point Apple does something similar with one of their devices. It isn’t like they don’t make enough money. Until then, do what works for you, but consider all of your options and REALLY asking yourself why you want to sign ANOTHER two-year contract for that new gadget …