Six years after the launch of the original iPhone in 2007, smartphones have become nearly ubiquitous in our lives. From toddlers to social media obsessed teens, be-suited businessmen and women to tech-savvy seniors, no matter where you turn it seems that everyone has their hands wrapped around a smartphone.
That hasn't stopped us from wanting to buy or upgrade to the newest smartphones as they’re released every year or so. Our FOMO-driven, Veruca Salt-esque, "I WANT IT NOW!" culture has led to a relatively recent phone-omena, if you will. Every year now, loyal customers will camp out at retailers and queue for blocks on the day of a new smartphone’s launch with the hope of being one of the first people to get their touchscreen-trained fingers on the latest and greatest tech-toy. With the impending announcement and subsequent release of Apple's iPhone 5S & 5C (OMG. IT'S GONNA COME IN CHAMPAGNE GOLD?! DADDY, I NEED IT.), we're not too far away from witnessing that circus once again return to town.
With so many smartphones, carriers, plans, and means by which you can buy or upgrade your smartphone currently available, how can even the smartest, most frugally-minded shopper be expected to pick and choose from the multitude of options at their disposal without fear of being taken to the bank?
Let’s take a look at all those choices and see if we can discern the best ways to get the smartphone you want at a price that won't force you to take a hammer to your piggy bank.
If you already have a smartphone that you’re ready to part with (or even a drawer full of old and rapidly-aging smartphones that could double as The Island of Misfit Mobiles), you should always consider utilizing a mobile phone buy-back or trade-in program in order to get some money for that antiquated digital brick you're looking to move on from.
While many of these programs are available in-store at big-box retailers, you'll find the majority of them online. These buy-back or trade-in programs will typically quote you the value of the device(s) you're looking to sell based on their make, model, and condition, then send you a box in the mail with prepaid return shipping that you'll use to send your phone or phones back to them in. In one to three weeks time, they'll send you payment for your old phone. Be careful to verify the payment method each service utilizes; some use gift cards, store credit, PayPal transfers, or even cash.
Also, if you're looking to recycle any other electronics, be sure to check out our previous post, Electronics Recycling That Pays: 6 Ways to Cash In Old Electronics for other tips and tricks to getting the best return on old and outdated tech.
Wonder where those phones you sold back or traded in went? Those phones have their data wiped, their components checked and cleaned, then turned around and sold back to consumers as refurbished models.
In most cases, refurbished models are nearly impossible to distinguish from their brand-new counterparts and are often sold for hundreds of dollars less than any fresh out of the box models. All major carriers and most retailers sell "certified like-new" or "premium refurbished" smartphones that, when paired with a new or renewed contract, can be sold for as low as $50 or, in some cases, even given away for free!
The last two smartphones that I've purchased have been refurbished models and I've yet to encounter any issues with them; be it cosmetic, performance-based, or otherwise.
Consumers’ desire for greater control over when they can upgrade their smartphone hasn't gone unnoticed by wireless carriers. This summer, AT&T, T-Mobile, and Verizon Wireless have all begun or will be rolling out new smartphone upgrade plans for customers who want the ability to upgrade to the latest-model smartphones sooner than their pre-existing contracts presently allow for (which is typically every two years or with a new two-year contract renewal).
These smartphone upgrade plans will run parallel to customers’ current talk, text, and data plans in the form of monthly payments on your current smartphone stretched over the course of 20 to 24 months. But are these plans worth it in the long run?
We crunched the numbers for AT&T’s Next, T-Mobile’s JUMP!, and Verizon’s Edge programs in order to compare and contrast all three and figure out which, if any, are worth signing up for.
|AT&T Next||T-Mobile JUMP!||Verizon Edge|
|iPhone 5 16GB cost||$650||$650||$650|
|Minimum payment||$32.50 per month for 20 months||$21 per month for 24 months||$27 per month for 24 months|
|Down payment on iPhone 5||$0||$146||$0, + 1st monthly payment ($27) at the point of sale.|
|SIM card fee||$0||$10 (new customers only)||$0|
|No. of upgrades permitted||1 in 12 months||2 in 12 months||2 in 12 months|
|Upgrade cost||$0||$145||$0, but only if 50% of the total cost of the phone is paid off. Otherwise, $164 payment due at 6 month mark to cover remaining 50% owed|
|Service costs||$90 per month for unlimited talk and text; plus $30 for 3GB of data, $50 for 5GB of data||$60 with 2.5GB of data or $70 with unlimited data, plus an additional $10 per month JUMP! program fee||$40 per month for unlimited talk & text, +$50 for 1GB of data, $60 for 2GB of data, $70 for 4GB of data, $80 for 6GB of data|
|First year cost w/ one upgrade||$1,830 with 3GB data||$1,422 (2GB data) to $1,542 (Unlimited data)||6 month upgrade: $926 w/ 2GB data, 12 month upgrade: $1524 w/ 2GB data|
The Verdict: The numbers listed above would suggest that T-Mobile's JUMP! program is the best deal out of the three upgrade plans. But those numbers belie a far more troubling aspect of smartphones and their accompanying contracts: it's not the phone that you should be worried about investing in, it's the long-term contracts that wireless carriers are using to siphon the money from your bank account.
Carriers are able to sell brand new smartphones at half the cost of their listed price because they know they'll be able to make up the difference (and then some) in the monthly service fees that you agree to pay for when you sign your two-year contract for a talk, text, and data plan. If you're paying for an additional service that gives you the ability to upgrade your phone more often by paying monthly installments on your pre-existing phone, even though the carriers are already planning on making that money back in their service plans, it would seem that the wireless carriers are taking you to the bank.
In his book, Do More, Spend Less, Brad's Deals' Founder & Editor-In-Chief Brad Wilson details his quest to save money when it came time to purchase an iPhone. After doing a little research, Brad found that he would save around $1,500 over the course of two years by paying the full price for an unlocked, refurbished iPhone ($479.99) and then purchasing prepaid sim-cards with unlimited talk, text, and data (180-day service sim-cards at $249.99, or $41.67 per month) from a prepaid wireless provider (StraightTalk Wireless) that actually piggybacked off of the network of one major wireless provider (AT&T). In doing so, Brad got the phone he wanted, the service he needed, and saved about half of the money he otherwise would have spent had he taken the default path to purchasing a smartphone and pairing it with a standard two-year contract.
This exact money saving model is something Europeans consider the standard for mobile phone service, as wireless contracts are virtually non-existent in Europe. They may not have the subsidized mobile phone prices which contract-bound services allow for, but in the end they're saving more money over the long haul by using prepaid mobile plans that they can "top-up" or reload at any time.
If you'd like to adopt Brad's method, be sure to check out these deals on instant prepaid wireless minutes and data cards from Walmart.
Considering the ever-shortening lifespan that most smartphones have before they're rendered relics by the release of a bigger, better, faster smartphone, there are ideal timeframes within which you should purchase certain smartphones. The best time to buy any smartphone is during the holiday shopping season, specifically Black Friday. On Black Friday, most retailers and carriers will bundle their smartphones with gift cards and/or accessories.
If you're concerned with having the latest, most up-to-date smartphone available, you should follow these guidelines:
Subscribe to Brad's Daily Alerts for the latest deals, shopping tips and more!