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Friday
Sep122014

It actually costs more to buy an iPhone 5s on a plan today than buying it outright

A new iPhone launch is a bit like the circus coming to town. There is wonder and amazement along with a little chaos and confusion. One area of chaos might be found in the pricing of the models about to be superseded. Take the iPhone 5s for instance. It is still the most advanced Apple phone you can purchase today. Why anyone would purchase one right now when in 7 days time they have the opportunity to get ahold of the new larger iPhone 6 or 6 Plus may be a fair question. But lets look at the options should you want to do just that.

Vodafone Australia

Right now Vodafone Australia will provide an iPhone 5s 32gb model on a 2 year plan for $84 per month ($70 plan + $14 phone payment per month). The truth about this pricing is that the $70 plan is the same as the $50 plan available to anyone that has their own phone - you are actually being charged an extra $20 to subsidise the phone. This subsidy is enough to cover less expensive brands and models, but if you want one with higher storage you have to pay a little extra. In the case of an Apple iPhone 5s 32gb, that is $14 extra per month.

So 24 months x $34 = $816. You can buy the same phone from Apple for $799. You are $17 worse off.

Interestingly if you choose the 16gb iPhone 5s from Vodafone on a 2 year plan you are a mile in front. That phone on a 2 year contract is free on the $70 plan. So in effect you are paying $20 per month x 24 months for the phone - $480 where the same phone outright from Apple is $749. That means Vodafone are subsidizing your phone to the tune of $269.

To be fair to Vodafone, two points need to be made. 1. Optus do a similar thing with their plans. The $60 2 year plan is similar to the $45 month to month plan - you pay an extra $15 per month to help the phone subsidy but Optus throw in an extra 500mb of data to help distance the plans. 2 - These plans are subject to change with the new iPhone 6 about to be released.

Good luck to all about to upgrade.

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    Response: AU Shopping Hub
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