the Technology Affinity blog

Assumption: you want to get the latest iPhone as soon as it comes out and you take good care of your gadgets and your iPhone is in good/great condition so you can sell it.

After taking a step back and looking at iPhone upgrade options long term I realised that it is cheaper to alternate between getting an 18 months contract and buying the respective new iPhone in a Prepaid bundle. Hit the more link for the details.

I purchased the iPhone 3G in June 2008 and my contract ends January 2010. Apple offers the iPhone 3GS from 19 June 2009. Since my contract does not end for another 6-7 months I would have to cancel it, ie. buying myself out of the contract paying for the line rental for the remainder of the contract. Then I could get a new 18 month contract with the iPhone 3GS lasting until January 2011.

Given Apple’s iPhone update cycle it is likely that the next iPhone will be released in June 2010, let’s call it the iPhone 2010 for argument’s sake. At that point in time I will again have an 18 month contract with 6-7 months left on it.

Considering the lowest tariff, buying myself out of the contract would cost around £200 each time.

The iPhone 3GS 32 GB costs £538.30 as a Prepaid Bundle, and £274.30 with a new 18 month contract.

I can sell my current iPhone 3G 16GB to a friend for £200, then the Prepaid Bundle will still cost me £338.30, only £64 more than on a new contract. But the important part is that my existing contract will end in January 2010 as per normal. When Apple brings out an iPhone 2010 I can just upgrade my existing contract without having to buy myself out of it, which would cost another ~£200 on top of the hardware cost. So over two new iPhones I spend ~£136 less compared to buying myself out of each contract every time.

So in conclusion, if you alternate between buying the new iPhone as a Prepaid Bundle when your contract is still running and upgrading when you have finished your contractual obligation you actually pay less over time. Take good care of your iPhone so you can sell it for a good price when you get yourself a new one.

Filed under: tipps