After last weeks iPhone 3G S announcement there has been a lot of heat, not so much around the product itself, but around the costs involved in purchasing one. This is especially true in the UK, where the cost of the handset and the upgrade costs have sparked a lot of controversy.
Firstly, the iPhone 3G S – worth the cost if you’ve already got a 3G? This is a hard one to call. The improvements are:
- Jump in size from 16GB to 32GB (assuming you buy the 32GB version)
- Improved camera – 2 to 3 megapixels
- Camera functions improved – auto white balance, better low light performance, macro
- Touch to focus
- Video recording
- Video editing
- Digital Compass
- Voice control
- Much improved chip speed
- Double the RAM to 256MB
- Screen has oleophobic coating
Not exactly ground breaking but for me it’s enough of an upgrade. We see the future of iPhones, much like the iPod range, to be evolutionary rather than revolutionary apart from a platform reboot ever 3-4 years. So assuming you agree and decide an iPhone 3G S is for you, how much will it cost? This is the real burning issue for 3G owners in the UK. For the iPhone 3G launch O2 allowed existing iPhone owners to upgrade to the iPhone 3G for £100. Everyone was happy and most also assumed that this was the model for iPhone’s upgrades in the future. Wrong!
Like every other mobile phone contract in the UK you would need to buy out your existing iPhone 3G contract before you could upgrade to the new 3G S. This announcement, made first on twitter, caused a bit of meltdown with #o2fail jumping into the trending topics on Twitter for a couple of days. Initially disappointed, in the cold light of day it was fairly obvious that this was the same rules for everyone else, so why not the iPhone – a bitter but expensive pill to swallow and if you don’t like it, don’t buy the 3G S. For me though, a purchase is likely so is there a better way to purchase than to buy out existing contract and start on a new fresh 18 month deal?
The spreadsheet above lists out costs assuming you buy off existing contract. Not cheap. Highlighted in blue is what we think is the typical option for most users which assumes that you will get £230 for your current iPhone 16GB 3G. There’s a few places that will buy your iPhone:
- MazumaMobile.com will buy your phone for £200
- Carphone Warehouse will buy it for £160
- eBay – forums quote £300 for your phone but it’s more like £250-£270. Remember those eBay fee’s too
Considering the potential flood of iPhone’s then £230 for a phone in great condition sounds fair. The issue with this method of upgrading is the new 18 month contract. Assuming that Apple will release an upgrade every 12 months, buying in to an 18 month contract will give you this hassle every year. Taking a 24 month contract will force you into upgrading every second generation which might not be too bad a thing if the theory on product evolution is sound. However there is another way which involves going down the Pay As You Go route.
It’s this route that offers the best cost and flexibility in our opinion. The table above assumes a 32GB purchase on Friday. You then swap the contract sim from your current phone to the new 3G S. Take the new sim from the 3G S and use that in your existing phone which you can then sell on for £230-£250. Let the 18 month contract expire then sign up for either a monthly or 12 month Simplicity contract from O2. This takes monthly costs down from £35 to £20 although you do lose visual voicemail and unlimited wi-fi on this tariff. You can also make a further saving by signing up to the Simplicity contract via QuidCo and you should also be able to leave the 18 month contract at least a month early so that’s another saving.
The monthly average via this route is slightly higher than opening a new 18 month contract but the benefit comes next year and the next iPhone. No contract to pay off and a tidy sum to be made on selling on the 3G S. Well, that’s the theory at least. If you don’t upgrade next year then another 12 months on Simplicity will be a significant saving over the iPhone contracts.
Hopefully that helps spell out some options for this coming Friday. All you need to do now is queue up on Friday morning, pre-order from O2 stores or make an appointment at a local Apple store which is the option I’m doing. Alternatively, chortle at the amount of money this is all costing and enjoy OS 3.0 which has just come out. The choice is yours.