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Are the Cheapest iPhones and Androids Pre-paid?

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Last week news came out that the prepaid carrier Cricket was going to start offering Apple's iPhone. This is a first, at least in America. Typically, consumers who wanted an iPhone previously would have to sign (or renew) a two year contract with the carrier, often at a price between $80 and $100 depending on how many cell phones minutes they needed each month.

That changes with Cricket. Consumers can now spend $500 for an iPhone 4S or $400 for an iPhone 4 and $55 a month for unlimited calling, text and 2.3 GB of data. (Aside: If you are going to pick a random number like 2.3 at least do something cool like the math constant e or about 2.718.) I am hoping at lot of readers here notice the cheaper plan and think, "Hey, this is going to be a much better deal over the long run." If so, you we are thinking alike.

However, it's always best to run the numbers. The cost of the Cricket iPhone 4S over two years is going to be $1,820. The iPhone at another carrier is going to cost $200, plus whatever the monthly rate is times the 24 months. If we do a little reverse math we find that you start to save money with Cricket if your plan is more than $67.50 a month (Math: ($1,820 - $200) = $1620. $1620/24 = $67.50). If your plan is $80, you'll save $13 a month or $312 over the two years. If your plan is $100, you'll save $33 a month or $792.

Depending on what you have now, it can either be a significant savings or not much at all. In fact, I've heard people somehow get on plans that are under $60... they would lose money by switching. Before you make the move to save money, there are two big things to consider:

  1. Coverage? - I don't know much about Cricket's coverage. I read that in some metro areas it is powered by Cricket itself and outside of those areas it uses Sprint. The good thing about not having a contract is that you are free to experiment and see how it works for you.
  2. The Looming iPhone 5 - I can't follow all the iPhone rumors that change daily, but I think I read that the iPhone 5 is coming out in September. So with Cricket, you would be spending $500 on a phone that may be second-rate in 3 months. That's fast even for the world of technology. If Cricket offers the newest iPhone 5 (which it probably won't), you could at least try to sell your older iPhone on Craigslist or Ebay and pay the difference to upgrade to the new one.

Update: Virgin Mobile has announced that the price for the iPhone 4 will be $550 and the iPhone 4S will be $650. That goes with $30/mo plan for 300 minutes, $40 for 1200 minutes, and $50 for unlimited minutes. That makes the total two year prices including the iPhone 4S phone: $1370, $1610, $1850 respectively. Unless you need unlimited minutes you are going to save money over the Cricket plan. For those who aren't big talkers they'll save close to $500 over the two years.

While that's an expensive phone, the price could drop when the iPhone 5 comes out. Additionally, at some point there will likely be used options on Ebay and Craigslist that will reduce the upfront cost further.

This is great news if you are in the market for an iPhone. However, if you are open to other smartphones, like me, Google's Android offers some great deals. For that I suggest Virgin Mobile, which runs on the Sprint network.

I currently have a $25/mo. plan on Virgin Mobile (300 minutes) paired with a Motorola Triumph. The phone cost me $300 (it can be had for around $150 if you buy used now), but the plan saves me $50/mo over what I was paying with Sprint. Over two years that saves me $900, even when accounting for the price of the phone.

Unfortunately, the $25 plan not available for new Virgin Mobile customers. It is now $35 or the same plan. If you want 1200 minutes it is $45 a months and truly unlimited calling will cost you $55 a month. I suspect that most people can make do on the $45 a month plan. A few days ago, Virgin Mobile released the HTC Evo 3D on it, which was Sprint's flagship phone about a year ago. Someone that signed up for that phone and plan then could have effectively gotten the same functionality for $30-40 less a month by waiting and going with Virgin Mobile.

Who knows if the price of the iPhone hits the right price on Virgin Mobile, maybe I'll join the Apple Borg as well.

Slightly Related Parting Thought: Three years ago today, I stood in line to get the Palm Pre on webOS. Yesterday, I found it in a drawer that I hadn't looked in for 4-5 months. After plugging it in, I played with it for a few minutes as it updated all my email accounts over wifi (it doesn't have function as a phone anymore). I still find it light years better than the Motorola Triumph that I got last year to replace it.

If you have time to read a long article, I suggest you read The Verge's article on the history of webOS. My favorite line is "As the saying goes, they were trying to skate to where they believed the puck was going; Mercer was trying to skate to where it was." I believe a mobile operating system built on the web is still where things are going (see: Samsung Chromebook: webOS Clone in a Netbook?), and webOS was there first, but many poor business decisions doomed the innovation from reaching a majority of consumers. Perhaps when Google merges ChromeOS and Android around 2015, mobile technology to get to where it was on June 6th, 2009.

Last updated on June 7, 2012.

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13 Responses to “Are the Cheapest iPhones and Androids Pre-paid?”

  1. Andy says:

    If you don’t mind having an older version of the iPhone, I’d wait until the iPhone 5 comes and see if the prices drop for the 4 and 4S.

    My contract with Verizon is up soon and I’d like to switch to the iPhone. I’m going to see what the iPhone 5 has over the 4 and 4S then make my decision. Now with prepaid carriers in play, I’ll definitely look at them.

  2. Lazy Man says:

    I don’t think the pre-paid carriers will get the iPhone 5 when it comes out. They typically don’t get the hottest phones. Since they are very price competitive with the monthly plan, it wouldn’t be a surprise if they didn’t drop the price for the 4 and 4S.

    I suspect it will come down to whether you want to sign a contract and pay some $500-800 more over a couple of years to be with Verizon to get the iPhone 5.

    In any case it is good to have multiple carrier options for the phone that you want.

  3. Tessie says:

    You could also have your smartie spouse buy a $25 sim card at Walmart and jailbreak your current iPhone with the expired AT&T contract, and pay $53/month for unlimited text, talk, and data with “Walmart’s Family Mobile pay-as-you-go plan.” I save $30/month, plus I get to keep my iPhone. Yes, it’s an older model but I like it just fine.

  4. Lazy Man says:

    Yeah, I’ve heard of people bringing sim cards from WalMart and putting on what I think is T-Mobile with that plan. I’ve thought of doing the same with a Palm Pre 3, but T-Mobile doesn’t have the Pre 3’s fastest speed as one of the radio mhz options. It gets a lot more technical than it should.

  5. Is that $55 inclusive of taxes or not?

    My wife has an iPhone, but I think we probably come out ahead with our AT&T plan because of the discount my company’s employees get.

    It’s important to note that if people hang on to their phone more than two years, they save even more money in the subsequent years (since you’re only amortizing the phone over the first two years in your example).

  6. Lazy Man says:

    With Virgin Mobile, I think it is inclusive of taxes. With Cricket, I’m not sure.

    I was going to point out that hanging on to the phone for more than two years yields bigger and bigger savings, but then I remembered this is about the iPhone and people tend to upgrade them every year. That negates the savings, but it can be minimized if you resell the old one when you upgrade.

  7. T Money Grip says:

    I am glad Google helped me find this blog. For some reason, you and I think alike about almost everything including Palm and WebOS! I found your blog after searching “how to not let Virgin upgrade my $25 plan when going to HTC Evo.”. I am typing this on my HP Touchpad I bought before the fire sale. I can’t read the Verge article because I want to cry when I do. They were so close with webOS and yet, made so many wrong moves. I guess we have hope that Google will salvage what they can from HP’s mess. I still can’t find any way to keep Virgin from forcing me into the $35 mo. plan. Its a bummer to lose the $25 beyond talk plan. Keep on trucking man and see you on pre central blog some day soon! I will also be reading this blog. Glad to have found it!
    And yes, why is my old pre still so great? I over clocked it and it was so awesome! Can I put it on cricket or virgin?

  8. Lazy Man says:

    I think you are my technology twin. Sorry you got stuck with before fire sale pricing on the TouchPad. I was able to cancel my order the day they announced they were shutting down the hardware production and picked up a pair in the fire sale.

    I got bad news for you. I don’t think there’s a way out of the Virgin upgrade if you get the Evo. I’m thinking of sticking with the Triumph for awhile or else possibly going to the dark side and getting in on the iPhone deal.

    You can’t put your old Sprint (CDMA) Pre on Virgin or Cricket. It’s not because it won’t technically work, it’s because the company’s policy. One thing that you could do if you don’t use a lot of voice minutes (like me) is look at the Wal-mart T-mobile plans. I believe there is one for $30 a month and you should be able to bring any GSM phone. The problem is that T-Mobile uses a frequency that isn’t full speed if you bring a phone that isn’t set up for it. However, they are starting to switch over 1900mhz spectrum, which would allow it to work with the Pre 3 at a full 4G speed. You just have pay through the nose to get a Pre 3 on Ebay or Craigslist and then deal with having an unsupported phone. I’m thinking about looking into this option… at least until we can put Open webOS on other hardware.

  9. T Money Grip says:

    Now I know that we are tech twins separated at birth.

    Thanks for the advice. I am so bummed that if I had just got Virgin’s new Optimus Elite when it came out, I could still be rolling $25 per month! I lost my phone on the 28th and that is when they started requiring any phone launched in May or later be on the higher plan. Its funny to me, I could easily afford ten bucks, but yet I now find myself hating a company I loved over such a small amount.

    I meant what I said, I cannot bring myself to read the article about the downfall of webOS. I think Open WebOS is just a way for Meg Whitman to save face and they will let it now die off altogether. Such a sad sad tale! If only Mark Hurd could have kept his hands to himself we would likely have webOS on our PCs right now and Microsoft would be shaking in their boots.

    Speaking of which, I have thought about holding out for Windows 8 both phone and tablet. But then I remember that I don’t want to be on another sinking ship even if the tech is greater than others that are steaming on into the horizon. Sinking is no fun!

    I will have to go back and see if your other posts discuss Windows 8 at all.

    I thought about getting a PRE 3 for $600 bucks, but what is the point now. What I always wanted was a Veer that could “bump” to my Touchpad. Why couldn’t disfunctional HP even make that work? I seriously loath that company so very much!

    If you think of any phone advice, i will be trolling your blog. I am loving it so far. Misery and cheapness love company.

  10. Lazy Man says:

    There’s a lot of psychology going on with personal finance and you stumbled on part of it. The raise of a cell phone bill from $25 to $35 a month hurts. That’s a 40% increase to use the same amount of cell tower resources as before. On the other hand, it is $10 and you are likely saving a lot of money vs. using the big four carriers out there. In fact, $35 is still one of best bargains in cell phone service.

    I don’t know if Microsoft would be shaking in their boots over webOS. They are doing what they did with the Xbox, spend several billion dollars to gain marketshare. Unless HP was going to make that their #1 priority, it would have been a tough fight.

    The touch-to-share technology wasn’t fully developed. It could only move URLs, which could have been the start of something big, but at this stage is just kind of useful, rather than a game-changer.

    If you ever do read the articles about dysfunctional HP, you’ll be surprised that webOS is as good as it is. As depressing as the Verge article was, it gave me a new appreciation for how they put out a truly revolutionary product in a very short time under extremely poor conditions.

    If you want to truly be my technology twin – read: Six Months with a Windows Media Center DVR (No Cable Equipment Rental Fees! Woohoo!)

  11. T Money Grip says:

    Hey El A. Zee,

    Do you read that Microsoft is thinking of making their own hardware now for Windows 8?

    Remember when HP’s Mark Hurd was going to double down with webOS and put it on tablets and laptops and printers and phones? It makes me laugh now to think that they backed away from that bold strategy while all the while being afraid that Microsoft would be mad at them. But in the end, its big Microsoft that kicks HP in the groin and runs away laughing.

    I get comfort in hoping that in some alternate universe Mark Hurd kept his willy in his pants and HP changed the tech world with webOS. It brings me comfort somehow to think that in an alternate reality that this might have happened. But in our universe, I just hope they go under quickly. I despise HP now and I love that Microsoft isn’t going to be the partner they hoped for.

  12. Lazy Man says:

    Yeah, Microsoft has its own tablet and everything. The media is saying how brilliant this idea is. Ugh.

    From what I read the “scandal” with Mark Hurd was used to push him out as other board members didn’t like him. I don’t think any legal action was ever taken or anything became of it. It’s worth reading the Fortune article that mentioned that Hurd was so cheap that the facilities were falling apart: http://tech.fortune.cnn.com/2012/05/08/500-hp-apotheker/.

    I still have hope that we’ll be able to dual boot a few phones and tablets down the road. http://phxdevices.com/ for the win.

  13. […] there are some cheap pre-paid carriers (and they represent the best deals). My favorite of them is Straight Talk, which has a partnership with Wal-Mart. For $45 a month you […]

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