Should I buy a factory unlocked iPhone?
August 2, 2010 12:39 PM   Subscribe

Should I buy an unlocked iPhone or remain indentured?

I have an iPhone 3G purchased about 2 years ago, under 3-year contract with Rogers (Canada). I'd like to upgrade to an iPhone 4 which was just released in Canada, and we Canadians now have the option of buying a factory-unlocked phone direct from Apple.

For a 32GB phone, the price is $269 with an additional 3-year contract with a wireless provider or $779 direct from Apple. Paying full price from Apple is the only way to get a factory-unlocked phone.

Emotionally, being contracted to my provider for the next 4 years is intimidating, but all phone companies in Canada seem to suck equally and my plan is pretty decent right now ($30/6GB data + $25 voice).

Is there a clear financial justification to buying a phone without contract? I've read that resale value for factory-unlocked phones is higher, but not sure what the actual numbers are. I guess there's also a chance I could negotiate $X a month savings when it's time to renew my contract, which could pay for itself.

Having an unlocked phone would be fantastic when I travel, but I know I can probably do that myself (just did my 3G in 10 minutes, thanks!). What other advantages are there to a factory unlocked phone?
posted by Gortuk to Technology (5 answers total) 2 users marked this as a favorite
Best answer: is the site you want for all things related to iphones, canada, and even the evil Rogers empire.

That being said, I can tell you the new contract will only be for 3 years; they don't "stack" for Rogers. (They do, however, with Fido). You will be signing a brand new 3 year contract if you go for the hardware upgrade with Rogers. (That being said... good luck finding a phone at the moment. They're sold out across country. Rumour has it new shipments are coming Tues or Wed... we shall see.).

Generally, I've heard that unlocked iPhones in perfect shape sell for about 75% of the price paid, bought new, once they're a year old. Given I'm seeing today brand new 32GB 3GS's on craigslist for $550, that sounds about right.

Looking at the math... that means you're paying about $180ish bucks a year to use the latest and greatest iPhone. For three years, that means $540 bucks. Which, incidentally, is slightly less than what you save by getting a "subsidized" phone from Rogers - $779-540 = $239.

Huh... if my math is right... it seem like it's better to buy unlocked :). That's if you can resell for 75%, however, and dont mind dealing with CL to do so.

Personally, I'm going with the subsidized phone and contract this time around, but I'm lazy and a lifelong Rogers customer with a pretty sweet deal (like you mentioned, I negotiated a lower monthly payment with them so they could keep my business). Maybe when the iphone 5 or whatever comes out and I can't get the subsidized price, then I'll buy unlocked.
posted by cgg at 1:02 PM on August 2, 2010

Gortuk: Is there a clear financial justification to buying a phone without contract?

The math is this (does not factor in taxes and fees, just the numbers you gave): The unlocked phone is $510 more than the one with contract. Over the life of the contract, that's about $14. If you can get equivalent service for $14 or more below what you're paying now, then it makes "financial" sense. Otherwise, no.

Bear in mind that not being with an "official" carrier will probably cut you off from various avenues of support, and you'll probably lose features like Visual Voicemail.'
posted by mkultra at 1:05 PM on August 2, 2010

There's another kind of math to consider: travelling.

Rogers has (or had, I hear this may have changed for the worse recently) decent International/US roaming plans now, so it's possible, with a minimum of foresight, to travel internationally and cover yourself for data and voice usage. The rates are (or were) worse than most other countries' carriers offer, but still a lot better than the alternative.

If you travel often, though, the math of forgetting about International plans and just buying a pay-as-you-go MicroSIM at your destination is a bit of a no-brainer. You can do this with a factory-unlocked iPhone - and for me, this would be the most compelling reason to buy one.

I got an iPhone 4 the other day and I chose to go the Rogers magic upgrade route. It's pretty liberal (most moderately early adopters qualify), and the "pay 180/280 on my next bill" won out over the "pay 750 now but have enhanced freedom forever" option. For me, for all of the negatives, Rogers has gotten JUST good enough (read: reasonable, well-priced, etc.) to tie myself to them.
posted by mikel at 1:38 PM on August 2, 2010

I have an unlocked 3GS, and the best plan I could wangle costs $75 per month for less than your plan gives you. The only advantage I can see is that I didn't have to commit to three years.
posted by timeistight at 2:40 PM on August 2, 2010

I guess there's also a chance I could negotiate $X a month savings when it's time to renew my contract, which could pay for itself.

Definitely try this. I have an ancient Blackberry with Rogers, but my contract expired this spring and I've been on month to month ever since as I considered my options. My lovely, lovely sister offered to buy me an iPhone as an early birthday present a few weeks ago. After calling Customer Relations once and getting an adequate offer, I called back again, and then one more time, and got a solid offer for a much better contract for both voice and data for $25/month less than what I'm paying now. Be persistent and polite, and you should be able to get something decent.

Now I just have to find a store nearby that has stock ...
posted by maudlin at 4:58 PM on August 2, 2010

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