Carrier Why do you buy your iPhones outright rather than from your carrier/telco?

[revs]

Because it’s cheaper to buy it outright and just pick a sim only tariff.

 

[Jay-Jacob]

Very basic simple reason I buy iPhone outright from UK from Apple instead of network (carrier) using contract cos it cheaper buy outright.

Like this for example.

If I buy iPhone 15 128GB from Apple: £799 and I pay £10 month for 5GB PAYG from EE. At moment only offer 4G, no 5G.

If I buy iPhone 15 128GB from EE: Pay £70 upfront (for example) and £25.00 for 5GB with 5G for 24 months contract so that makes it £53.65 month.

Outright from Apple after 24 months will cost me: £1,039.
Buy contract from EE after 24 months will cost me: £1,357.60.

Buying outright from Apple save me £318 after 24 months.

Obviously other reason I like buying outright that iPhone not locked to network. Plus network like rise price mid contract and end up paying even more than beginning but you are stuck paying it until 24 months are up. I like able to switch anytime I want to and I can use e-sim any time I want too.

It will be harder for people cannot afford iPhone full price outright will use network contract so they can get iPhone. Smaller payment per month easier for them but will end up paying more in end.

 

[Tru3B1u3]

I don't buy my phone through my carrier, but it's actually a detriment not to. I know I'm making a decision that doesn't make financial sense. Why?

• If you're on one of the big three carriers in the USA, you're already paying $20-$90/month for your phone service, depending on the level of service and the number of phones on the plan.
• The cost of your monthly service doesn't change if you bring your own phone. Often, carriers will entice you with a $5-$10/month credit for 6-12 months if you bring your own phone to their service. But, once that temporary discount ends, you're back to paying the full price of the phone service. It also ends if, during the discounted period, you purchase a new phone from the carrier.
• If you trade in your old phone (or pretty much any old phone that you can buy off eBay), you'll get a significant discount (usually $700-$1000) off the price of a new phone, with the discount being split between 24-36 months.
• Let's assume you pay $50/month for phone service with AT&T/Verizon/T-Mobile. If you buy a phone from Apple, you'll have the cost split over 24 monthly payments. Over 24 months, you'll pay $1,000 for the phone + $1,200 for the service (assuming you stick with the carrier), for a total of $2,200 in two years. If you buy the phone from the carrier, they're going to subsidize, at a minimum, 50% of the cost of the phone over two years, saving you at least $500. That's a lot of money.
• The important point is that AT&T/Verizon/T-Mobile is building in the cost of that phone subsidy into the price of the monthly service. Let's say the value of that subsidy is roughly $10/month. If AT&T/Verizon/T-Mobile permanently discounted your service by $10/month if you continually brought your own phone, then purchasing your phone from Apple would be a wash. But every month you pay Apple for your phone instead of a carrier is a month you're paying at least $10 more than you have to, and often, $20+ more than you have to.
• To me, the main exception is if you want to upgrade your phone every year, as the carriers have slowly been eliminating this, or at least making it more expensive to do so. But if you just want to know how you can pay for your phone over 2-3 years, it's clearly cheaper to buy from your carrier, even if you leave the carrier after only a couple of months.

• Point A: True, but even with multiple lines, you can still use MVNO’s (lower priced plans from the Big 3 to cater to those looking to save)

People could leave the Big 3 but habit, low cost of entry and incentives like Netflix, Disney, “free phones” keep them there.

• Point B: True, but that doesn’t really have anything to do with lowering the cost of the phone

Plus, phones older than iPhone 12 (millions have older phones) have garbage trade in value. Just look the abysmal trade in value of the 13 Mini (2 year old phone)

• Point C: If the goal is to save money, even a grandfathered plan of $50/month (over 3 years) is higher than Mint, Cricket Wireless & Visible (uses the towers of the big 3)

Visible - $25/month
Mint - $30/month
Cricket Wireless - $30/month

So the savings from a grandfathered plan would need to be $30/month to even be competitive.

Multiple lines help with this, but that’s only if everyone is paying $30/month or less.

Generally speaking, it’s cheaper to buy it outright to acquire the phone itself.

Going through a carrier contract is all about getting the phone NOW (rather than later) through subverting the upfront cost with a cost spread over 2-3 years.

 

[Tru3B1u3]

In recent years, you don't need to get a new line for a promotion. Just agree to get credits over 36 months.

Depends on the promotion. Verizon was offering a “free iPhone 13 Mini” but it required a new line :/

If I was already a customer, I wouldn’t have been eligible

 

[fatTribble]

I do the iPhone Upgrade Program. Apple makes it easy. I try to avoid doing anything with my carrier.

 

[decafjava]

In Switzerland (and I think in many if not most European countries) none of the carriers lock their phones anymore. As it is I bought my current phone (15 PM) partly with insurance money from the claim for the theft of my 13 PM.

 

[canuckRus]

Buy outright rather than be forced into higher priced plan every time I purchase a new phone.

 

[kevink2]

Not sure what plan you are on but 60 days? Nope. Had four phones in the family, all paid off, 3 via AT&T, one bought outright. All three AT&T purchased phones (iPhone 11, iPhone 13, Galaxy Flip 3) all were locked and I had to request unlock. Now, that may have changed in the last year. All 4 phones were on the $75 Unlimited everything plan.

These days I buy outright and all are on Mint.

60 days if you bought it locked to ATT, postpaid, and it is paid off. But you have to request the unlock, unlike with Verizon and iPhones.

 

[pdxrevolution]

• Point A: True, but even with multiple lines, you can still use MVNO’s (lower priced plans from the Big 3 to cater to those looking to save)

People could leave the Big 3 but habit, low cost of entry and incentives like Netflix, Disney, “free phones” keep them there.

• Point B: True, but that doesn’t really have anything to do with lowering the cost of the phone

Plus, phones older than iPhone 12 (millions have older phones) have garbage trade in value. Just look the abysmal trade in value of the 13 Mini (2 year old phone)

• Point C: If the goal is to save money, even a grandfathered plan of $50/month (over 3 years) is higher than Mint, Cricket Wireless & Visible (uses the towers of the big 3)

Visible - $25/month
Mint - $30/month
Cricket Wireless - $30/month

So the savings from a grandfathered plan would need to be $30/month to even be competitive.

Multiple lines help with this, but that’s only if everyone is paying $30/month or less.

Generally speaking, it’s cheaper to buy it outright to acquire the phone itself.

Going through a carrier contract is all about getting the phone NOW (rather than later) through subverting the upfront cost with a cost spread over 2-3 years.

MVNOs are absolutely cheaper. No argument there. I didn't include MVNOs in my discussion because MVNOs don't give you a discount on the price of a phone. At least not iPhones. Using an MVNO and buying your phone out right makes a lot of sense.

OP's question was wanting to know why someone pays full price for the phone up front vs. doing a 2-3 year payment plan with a carrier. My points were aimed at people who decide to stick with full-price carriers. If you're not going to use an MVNO, then you probably should get your $20+/month phone subsidy from the carrier. You're paying for it in the price of the monthly service anyway.

What makes the least sense is to stick with AT&T/Verizon/T-Mobile year after year but then not buy phones from them. If you're going to use an MVNO or change carriers all time, go for it. But if you're sticking with Verizon for 10 years and not buying phones from them, you're wasting money.

 

[dk001]

60 days if you bought it locked to ATT, postpaid, and it is paid off. But you have to request the unlock, unlike with Verizon and iPhones.

Thanks. That makes sense.

 

[The-Real-Deal82]

Phones don't generally tend to be locked to carriers anymore, that in my experience hasn't been the case for a number of years. They don't need to lock phones as they have all your details anyway should you stop paying your contract.

 

[Tru3B1u3]

MVNOs are absolutely cheaper. No argument there. I didn't include MVNOs in my discussion because MVNOs don't give you a discount on the price of a phone. At least not iPhones. Using an MVNO and buying your phone out right makes a lot of sense.

OP's question was wanting to know why someone pays full price for the phone up front vs. doing a 2-3 year payment plan with a carrier. My points were aimed at people who decide to stick with full-price carriers. If you're not going to use an MVNO, then you probably should get your $20+/month phone subsidy from the carrier. You're paying for it in the price of the monthly service anyway.

What makes the least sense is to stick with AT&T/Verizon/T-Mobile year after year but then not buy phones from them. If you're going to use an MVNO or change carriers all time, go for it. But if you're sticking with Verizon for 10 years and not buying phones from them, you're wasting money.

Ah I see. Yes, I agree that if you pay full-price and never switch carriers (you’ve just never bothered), you might as well get a phone through the carrier.

 

[leifp]

Just to add myself to the anecdote pile: I travel and even when I don’t, the concept of having a sole carrier that I stick with is a bit much for me. Historically. Although recently I’ve kind of settled on one, in Canada at least. But it’s not great and I’ll look around… but Canada is a s*show of poor cell company pickings combined with outrageous pricing…

 

[jlc1978]

What's happening to me?!?

Look for the pods...

We are on an 8.5 year old grandfathered plan with the pricing that you can infer from having that plan. One of my lines is free. I don't chase deals or promos because having this plan is the primary value of having T-Mobile.

Same here. Any plan with the "free" iPhone would cost me over $120 extra month for my 6 lines; doubling my bill. Unless I upgrade all lines every year it's way cheaper to buy outright after trade in and discounts on phone and gift cards.

Plus it's not SIM Locked.

There does seem to be a certain amount of snobbery on here about contracts and this superior view that buying outright is the correct option. Not everyone wants to do that and in some cases people spread the cost over a number of years to make it more affordable on a monthly basis. Heaven forbid some in society don’t have £1300 sitting in their bank to make a big purchase eh? I personally choose not to, but we all choose whatever method works for us.

Of course, everyone needs to pick plan based on what is best for them. It's your wallet, not the MR commentariat's.

• Point A: True, but even with multiple lines, you can still use MVNO’s (lower priced plans from the Big 3 to cater to those looking to save)

People could leave the Big 3 but habit, low cost of entry and incentives like Netflix, Disney, “free phones” keep them there.

The incentives, assuming you would pay otherwise, is part of teh cost decision. For me, TMob's free text and unlimited low speed data abroad is a feature MVNOs don't offer and getting a plan everywhere I go would be more than the cost savings with a MVNO plan.

• Point C: If the goal is to save money, even a grandfathered plan of $50/month (over 3 years) is higher than Mint, Cricket Wireless & Visible (uses the towers of the big 3)

Visible - $25/month
Mint - $30/month
Cricket Wireless - $30/month

So the savings from a grandfathered plan would need to be $30/month to even be competitive.

Mine is cheaper and I could never get that rate again; so I stick with it. YMMV

 

[kevink2]

Phones don't generally tend to be locked to carriers anymore, that in my experience hasn't been the case for a number of years. They don't need to lock phones as they have all your details anyway should you stop paying your contract.

In the US it is different. Except for Verizon, who will unlock after 60 days even a phone on installments, the others don't tend to unlock until paid off.

 

[The-Real-Deal82]

In the US it is different. Except for Verizon, who will unlock after 60 days even a phone on installments, the others don't tend to unlock until paid off.

That doesn’t surprise me to be honest.

 

[dk001]

In the US it is different. Except for Verizon, who will unlock after 60 days even a phone on installments, the others don't tend to unlock until paid off.

And then you have to request it.

 

[avheatherim]

This is exactly what people get hung up on. If you end up wanting to upgrade before the 36-month period is up, just pay off the remaining balance and you can upgrade. You'll just miss out on the remaining credits.

But why take my post out of context? The part about being forced into a higher-priced plan also makes this not worth it.

 

[pdxrevolution]

In the US it is different. Except for Verizon, who will unlock after 60 days even a phone on installments, the others don't tend to unlock until paid off.

This isn't really correct. Assuming you are paying for your phone through your cell provider's installment plan, whether the phone is ever locked depends on who you purchased your phone from. So, assuming you are on AT&T/T-Mobile/Verizon on a postpaid plan with a phone installment plan:

AT&T:

• Whether you purchase your phone from Apple or AT&T, your phone is locked until you finish paying off your phone. You must then request the phone to be unlocked.

T-Mobile:

• If you purchase the phone through Apple, even though it's a T-Mobile installment plan, the phone is unlocked from day 1.
• If you purchase the phone through T-Mobile, the phone is locked until you finish paying it off. You must then request the phone to be unlocked.

Verizon:

• If you purchase the phone through Apple, even though it's a Verizon installment plan, the phone is unlocked from day 1.
• If you purchase the phone from Verizon, Verizon keeps the phone locked for 60 days and then automatically unlocks the phone.

Sources:
https://www.att.com/deviceunlock/
https://www.t-mobile.com/responsibility/consumer-info/policies/sim-unlock-policy
https://www.verizon.com/support/device-unlocking-policy/

From the FAQ on Apple's website when you attempt to purchase a phone:

• Will my new iPhone be unlocked?​

  Yes. An iPhone purchased from apple.com is unlocked. Once your new iPhone is activated, it remains unlocked, which means you can use it with any network that provides service for iPhone. The exception is when you buy an iPhone with an AT&T Installment Plan. It will be locked to AT&T and will only work on the AT&T network for the term of your Installment Plan agreement.