Has anyone ever tried to model the benefits of going with an unlocked, contract free phone over one tied to a specific carrier with a fixed contract?
I know that a lot of people, here in particularl, find the notion of locked down hardware repugnant, but from a cost/benefit perspective, I have just not seen that much of a problem, personally. I mean, are there usage scenarios with an assumption that you will have continuous approximate service (for the purposes of the iPhone, that would be a voice and data plan) that are common where carrier lock-in is very costly?
For me personally, it's worked out a lot cheaper. I got an unlocked iPhone 3G for ~€510 (inc VAT) and have been using it with a prepaid data SIM. Total cost of data over a year has been about €20-25. I happen to use another phone for voice, and I pay ~€2/month on average for that.
Extrapolated over 2 years: ~€610. (+ €60 for the second phone if you must include it)
The best iPhone tariff at the time was €35/month for 2 years - €840.
Added bonuses:
- I don't have to pay exorbitant data roaming charges when abroad, as I can just swap in a local SIM and have done so in South Africa, UK and Spain. (this is the reason I use a separate SIM+phone for voice)
- iPhone is exclusive to Orange & T-Mobile in Austria, the 2 worst networks for 3G. (this isn't much of an issue as "worst" here is still pretty good compared to most countries)
- ability to resell or otherwise pass it on (obviously)
This isn't strictly a comparison of the same phone with a contract and without, since it's compared to the nexus one without a contract, but a more detailed search will turn up some (some have been posted here on hacker news).
Other than what's outlined in that comparison, what other benefits are you thinking of? It mainly comes down to price, and often the total cost to the consumer over the length of the contract is more when the phone is subsidized vs when there is no contract. There's a perception that the the subsidized price is cheaper (just like how government subsidized student loans are cheaper because the government initially "pays" the interest), but I think often the phone is just being paid for in installments in each monthly bill during the contract.
This is just wild massing guessing on my part, but without vendor/hardware lock-in, wouldn't competition (and therefore service) be much better? As of now, there's several prohibitive costs to switching services due to having contract cancellation fees, requiring a new phone, not necessarily being able to transfer your data, etc. With an unlocked phone, you'd still have those contract cancellation fees, but it would be a much smoother process to switch. If it was easy enough to change to another carrier, carriers would most likely focus more on being more attractive than their competitors to try to entice customers to them. As it stands, it seems to me like few people would actually bother switching unless they were grossly unhappy with their service.
However, I'll freely admit that I don't necessarily have data or experience to back this up. Am I on the right track here, or babbling aimlessly?
It seems that the elements are in place for some real competition in Canada:
- all the major carriers support the iPhone
- Apple is selling unlocked phones
- you can get a voice/data plan without a contract if you have an unlocked phone
- phone number portability works well
I think it's possible to get unlocked Blackberry and Android phones too, but not sure. It's too early to tell if this will lead to lower prices and better service, but I'm optimistic.
Comments
Has anyone ever tried to model the benefits of going with an unlocked, contract free phone over one tied to a specific carrier with a fixed contract?
I know that a lot of people, here in particularl, find the notion of locked down hardware repugnant, but from a cost/benefit perspective, I have just not seen that much of a problem, personally. I mean, are there usage scenarios with an assumption that you will have continuous approximate service (for the purposes of the iPhone, that would be a voice and data plan) that are common where carrier lock-in is very costly?
For me personally, it's worked out a lot cheaper. I got an unlocked iPhone 3G for ~€510 (inc VAT) and have been using it with a prepaid data SIM. Total cost of data over a year has been about €20-25. I happen to use another phone for voice, and I pay ~€2/month on average for that.
Extrapolated over 2 years: ~€610. (+ €60 for the second phone if you must include it)
The best iPhone tariff at the time was €35/month for 2 years - €840.
Added bonuses:
- I don't have to pay exorbitant data roaming charges when abroad, as I can just swap in a local SIM and have done so in South Africa, UK and Spain. (this is the reason I use a separate SIM+phone for voice)
- iPhone is exclusive to Orange & T-Mobile in Austria, the 2 worst networks for 3G. (this isn't much of an issue as "worst" here is still pretty good compared to most countries)
- ability to resell or otherwise pass it on (obviously)
- I can freely move country (it happens)
- I can tariff-hop
More so than things like this, which is 6 months old? http://www.billshrink.com/blog/6847/nexus-one-vs-iphone-droi...
This isn't strictly a comparison of the same phone with a contract and without, since it's compared to the nexus one without a contract, but a more detailed search will turn up some (some have been posted here on hacker news).
Other than what's outlined in that comparison, what other benefits are you thinking of? It mainly comes down to price, and often the total cost to the consumer over the length of the contract is more when the phone is subsidized vs when there is no contract. There's a perception that the the subsidized price is cheaper (just like how government subsidized student loans are cheaper because the government initially "pays" the interest), but I think often the phone is just being paid for in installments in each monthly bill during the contract.
This is just wild massing guessing on my part, but without vendor/hardware lock-in, wouldn't competition (and therefore service) be much better? As of now, there's several prohibitive costs to switching services due to having contract cancellation fees, requiring a new phone, not necessarily being able to transfer your data, etc. With an unlocked phone, you'd still have those contract cancellation fees, but it would be a much smoother process to switch. If it was easy enough to change to another carrier, carriers would most likely focus more on being more attractive than their competitors to try to entice customers to them. As it stands, it seems to me like few people would actually bother switching unless they were grossly unhappy with their service.
However, I'll freely admit that I don't necessarily have data or experience to back this up. Am I on the right track here, or babbling aimlessly?
It seems that the elements are in place for some real competition in Canada:
I think it's possible to get unlocked Blackberry and Android phones too, but not sure. It's too early to tell if this will lead to lower prices and better service, but I'm optimistic.With an unlocked phone you can resell it.
I bought an unlocked iPhone 3GS in January and paid a premium, but I will probably sell it this summer, if I can get an unlocked iPhone 4G.